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Treasury Rebuffs Wall Street Concern Over Bond Market Liquidity

  • Government premiers market-conditions liquidity measure
  • Blog post is first in a series discussing debt-market dynamics
Updated on

The world’s largest debt market is sound and traders’ ability to transact remains robust, U.S. Treasury Department officials said in a blog posted on the government’s website, rebuffing contentions from the bond market’s biggest players that trading conditions are deteriorating.

Measures such as daily trading volumes, bid-ask spreads, market depth and the price impact of trades in the $13.4 trillion government-debt market remain within historic averages, according to the post. The new index developed by the government, which incorporates many of these traditional measures, showed conditions are in line with those earlier this decade, though liquidity diminished when market-moving data are released.