The Financial Times reported March 28 that “the U.S. bond market is showing signs of strain,” and “ease of trading in the world’s most important debt has worsened in recent weeks, banks and investors say.” In the past few weeks, other financial media have hinted at trading in the Treasury market becoming more difficult.
Treasury yields have moved in a wide range and “The pressure in markets suggests some investors are pulling back from trading Treasuries,” reported the City of London paper. It quotes an AllianceBernstein trader that “Liquidity … has deteriorated over the last month.”
The FT included snippets of quotes from a good number of bond traders, most of whom “reassured” that the liquidity problem was just a repeat of that caused by Trump’s April 1 “Liberation Day” tariff announcements. But it also included in its report, signs that this time something worse might occur.
