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Yellen Worries Over Loss of ‘Adequate Liquidity’ in Treasuries

  • Treasury secretary notes surge in supply of Treasuries
  • Yellen flags that Fed’s standing-repo facility could help
Janet Yellen

Janet Yellen

Photographer: Yuri Gripas/Sipa/Bloomberg

Treasury Secretary Janet Yellen cited concerns about the potential for a breakdown in trading of US Treasuries, as her department leads an effort to shore up that crucial market.

“We are worried about a loss of adequate liquidity in the market,” Yellen said Wednesday in answering questions following a speech in Washington. The balance-sheet capacity of broker-dealers to engage in Treasuries market-making hasn’t expanded much, while the overall supply of Treasuries has climbed, she noted.