Navigating Changes to Fixed Income Liquidity
Liquidity in US fixed income markets plays a central role in US economic activity, the stability of the financial system and successful implementation of Fed monetary policy.
Liquidity in the US fixed income markets has been volatile since 2019 due to market events, most notably the impact of Covid-19, the onset of the Fed’s tightening cycle, the geopolitical conflict and the 2023 regional banking crisis in the US.
In our view, the rapidly changing underlying liquidity environment in the US creates new opportunities in fixed income markets.
Our investment and trading professionals used a new proprietary Buy-Side Trading Solutions liquidity metric, the Liquidity Score, to analyze more than 500,000 quotes to provide a deeper understanding of liquidity trends and their impact on US fixed income markets.