Reported 7 months ago
Bond market participants in the US are worried about deteriorating market liquidity due to the continuous issuance of a large amount of debt by the US Treasury to support deficit spending. Liquidity has worsened in recent years as the market size grows, with concerns raised at the Fixed Income Leaders Summit event in Boston. Despite efforts to improve trading conditions, vulnerabilities remain, particularly with the market doubling over the past decade to $27 trillion, and dealers' capacity being constrained by capital requirements. The inverted yield curve and potential difficulties in market makers picking up volumes further add to liquidity concerns in the bond market.
Source: YAHOO