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JPMorgan Says Treasuries Coping Amid Worst Liquidity Since 2020

  • Market depth worst since 2020, price impact is less: JPMorgan
  • Fed path uncertainty is driving wild yield swings across curve

The Federal Reserve can look past low liquidity in the Treasuries market and continue with its rate hikes, according to strategists at JPMorgan Chase & Co. 

While the world’s biggest bond market endured some illiquidity recently, the impact on prices isn’t as severe as during the onset of the pandemic, according to a note Tuesday from a team including Jay Barry. As such, it’s not affecting financial stability and the Fed will make that distinction when deciding on its rate hikes, they said.