Treasuries’ New-Found Haven Status Masks Vanishing Liquidity
- Liquidity has dropped to lowest level since start of pandemic
- Elevated volatility damps speculators’ risk appetite: Mizuho
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Treasuries have been given some respite from the deepest selloff in recent history as concern about slowing economic growth has mounted. Haven demand however has done little to prevent liquidity in the $22 trillion market from worsening even further.
The Bloomberg US Government Securities Liquidity Index -- a gauge of deviations in yields from a fair-value model -- rose on Wednesday to the highest since March 2020, when the early stages of the Covid pandemic wreaked havoc on the economy.