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Liquidity Conditions in the US Treasury Market Consistent with Historical Levels

In a recent blog post, the Department of Treasury summarized the current liquidity conditions in the US Treasury market.  The post acknowledged the significant structural changes that the Treasury market have experienced over the last two decades, particularly the technological changes and the related growth of high speed electronic trading which have resulted in changes in intermediation and liquidity in those markets.   Although the post finds that current levels of liquidity are consistent with historical levels, the authors acknowledge that “while traditional measures may be indicative of general market conditions, they may not capture other changes in liquidity conditions.” 

This post is the first in a series on fixed income markets intended to “share our perspective on the available data, discuss key structural and cyclical trends, and reiterate our policy priorities.”