Fed Doesn’t See Bond Liquidity Problems, Sees Moderate Risks
Yellen: Not Clear If There Is a Problem With Liquidity
This article is for subscribers only.
The Federal Reserve doesn’t see signs of liquidity problems in U.S. bond markets, despite warnings from investors to the contrary.
“While market commentary increasingly pointed to a possible deterioration in liquidity in these markets, a variety of liquidity metrics -- including bid-asked spreads and bid sizes -- have displayed no notable signs of liquidity pressures over the past half-year,” the Fed board said Wednesday in the U.S. central bank’s semi-annual monetary policy report to Congress.