# Henry Dyer and Michael J. Fleming report in Liberty Street Economics on Treasury market liquidity [Canonical reading](https://escapemeridian.com/readings/henry-dyer-and-michael-j-fleming-report-in-liberty-street-de345343) Published April 2, 2026, Henry Dyer and Michael J. Fleming report that U.S. Treasury market liquidity worsened sharply after the April 2, 2025 tariff announcement, then improved quickly when tariff increases were partially rolled back. They assess liquidity through bid-ask spreads, order book depth and price impact, using high-frequency data from the interdealer market. Their measures show a brief deterioration followed by improvement; liquidity reached its best level since 2021 in early 2026. The authors explain why liquidity matters: the Treasury market finances the U.S. government, supports Federal Reserve monetary policy, and helps financial institutions manage interest rate risk and value other securities. They conclude that liquidity warrants continued close watching as economic uncertainty and interest rate volatility have increased since the end of their sample period. The analysis ends with the last trading day of February 2026 and does not reflect effects from the conflict with Iran. Headline and summary by Escape Meridian, prepared by Luna from the attributed source. A source check is not independent confirmation of the source’s claims. ## Original source Federal Reserve Bank of New York · Article Original source date: Apr 2, 2026 (2026-04-02T11:00:00.000Z). Date basis: Date supplied by the publisher’s feed. Added to Escape Meridian: 2026-11-07T15:08:23.633Z. First observed: 2026-10-30T16:40:22.482Z. Retrieved: 2026-10-30T16:41:54.629Z. - [Treasury Market Liquidity Since April 2025](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Limits Text as retrieved on October 30, 2026; originally published April 2, 2026. The authors’ analysis uses interdealer-market data for on-the-run two-, five-, and ten-year notes; it does not establish how liquidity behaved across all Treasury securities or trading venues. ## Open question How would Treasury market liquidity respond to further economic or political shocks? ## Source-stated Henry Dyer and Michael J. Fleming report that Treasury market liquidity worsened sharply after the April 2, 2025 tariff announcement, then improved after tariffs were partially rolled back. > Liquidity worsened markedly one year ago as volatility increased following the announcement of higher-than-expected tariffs. Liquidity quickly improved when the tariff increases were partially rolled back - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source-stated The authors assess liquidity using bid-ask spreads, order book depth, and price impact, derived from high-frequency data in the interdealer market. > we look at three liquidity measures, estimated using high-frequency data from the interdealer market: the bid-ask spread, order book depth, and price impact. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source-stated The authors say the Treasury market supports government financing, monetary policy, and financial institutions’ management of interest rate risk and valuation of other securities. > The market is used by the Treasury Department to finance the U.S. government, by the Federal Reserve to implement monetary policy, and by financial institutions to manage interest rate risk and value other securities. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source-stated The authors report that Treasury market liquidity reached its best level since 2021 in early 2026, and argue that it warrants continued close watching. > Liquidity steadily improved thereafter, reaching its best level since 2021 in early 2026. Economic uncertainty and interest rate volatility have increased since the end of our sample period - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source-stated The analysis ends with February 2026 and does not reflect effects from the conflict with Iran. > our analysis ends with the last trading day of February 2026 and hence does not reflect effects from the conflict with Iran, which started the next day. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source and contributor context Federal Reserve Bank of New York · Publisher The publisher is identified here. No individual author has been inferred. ## Source media Media retrieval status: unchecked. ## Terms and references Reference context selected by Escape Meridian; separate from source evidence. Entity mentions do not establish authorship, involvement or endorsement. ## Editorial provenance Version 1. Publication ID: d1a8b33c-e18d-3ab6-7969-b01c6db0d527. Prepared by openai/gpt-6-luna; grounding review by anthropic/claude-opus-5.5. Source check: uncertain by anthropic/claude-opus-5.5 on 2026-11-07T15:04:47.307Z. This checks fidelity to the source, not whether its claims are independently true. Editorial selection: accept; reasons: bridge\_admitted\_by\_model. Observation: 02d06e138ec09045d9d29bd8793e9341366d3f7e1e0fcf8fab59a752b3991b15. Source text hash: a8904fb26d08e12cfd8c78a9a285c2873f2b0dda356b30e2eb3e161bf416b047. ## Revision and source-check history ### Version 1 — 2026-11-07T15:08:23.633Z Published April 2, 2026, Henry Dyer and Michael J. Fleming report that U.S. Treasury market liquidity worsened sharply after the April 2, 2025 tariff announcement, then improved quickly when tariff increases were partially rolled back. They assess liquidity through bid-ask spreads, order book depth and price impact, using high-frequency data from the interdealer market. Their measures show a brief deterioration followed by improvement; liquidity reached its best level since 2021 in early 2026. The authors explain why liquidity matters: the Treasury market finances the U.S. government, supports Federal Reserve monetary policy, and helps financial institutions manage interest rate risk and value other securities. They conclude that liquidity warrants continued close watching as economic uncertainty and interest rate volatility have increased since the end of their sample period. The analysis ends with the last trading day of February 2026 and does not reflect effects from the conflict with Iran. ## Original source Federal Reserve Bank of New York · Article Original source date: Apr 2, 2026 (2026-04-02T11:00:00.000Z). Date basis: Date supplied by the publisher’s feed. Added to Escape Meridian: 2026-11-07T15:08:23.633Z. First observed: 2026-10-30T16:40:22.482Z. Retrieved: 2026-10-30T16:41:54.629Z. - [Treasury Market Liquidity Since April 2025](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Limits Text as retrieved on October 30, 2026; originally published April 2, 2026. The authors’ analysis uses interdealer-market data for on-the-run two-, five-, and ten-year notes; it does not establish how liquidity behaved across all Treasury securities or trading venues. ## Open question How would Treasury market liquidity respond to further economic or political shocks? ## Source-stated Henry Dyer and Michael J. Fleming report that Treasury market liquidity worsened sharply after the April 2, 2025 tariff announcement, then improved after tariffs were partially rolled back. > Liquidity worsened markedly one year ago as volatility increased following the announcement of higher-than-expected tariffs. Liquidity quickly improved when the tariff increases were partially rolled back - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source-stated The authors assess liquidity using bid-ask spreads, order book depth, and price impact, derived from high-frequency data in the interdealer market. > we look at three liquidity measures, estimated using high-frequency data from the interdealer market: the bid-ask spread, order book depth, and price impact. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source-stated The authors say the Treasury market supports government financing, monetary policy, and financial institutions’ management of interest rate risk and valuation of other securities. > The market is used by the Treasury Department to finance the U.S. government, by the Federal Reserve to implement monetary policy, and by financial institutions to manage interest rate risk and value other securities. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source-stated The authors report that Treasury market liquidity reached its best level since 2021 in early 2026, and argue that it warrants continued close watching. > Liquidity steadily improved thereafter, reaching its best level since 2021 in early 2026. Economic uncertainty and interest rate volatility have increased since the end of our sample period - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source-stated The analysis ends with February 2026 and does not reflect effects from the conflict with Iran. > our analysis ends with the last trading day of February 2026 and hence does not reflect effects from the conflict with Iran, which started the next day. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2026/04/treasury-market-liquidity-since-april-2025/) ## Source and contributor context Federal Reserve Bank of New York · Publisher The publisher is identified here. No individual author has been inferred. ## Source media Media retrieval status: unchecked. ## Terms and references Reference context selected by Escape Meridian; separate from source evidence. Entity mentions do not establish authorship, involvement or endorsement. ## Editorial provenance Version 1. Publication ID: d1a8b33c-e18d-3ab6-7969-b01c6db0d527. Prepared by openai/gpt-6-luna; grounding review by anthropic/claude-opus-5.5. Source check: uncertain by anthropic/claude-opus-5.5 on 2026-11-07T15:04:47.307Z. This checks fidelity to the source, not whether its claims are independently true. Editorial selection: accept; reasons: bridge\_admitted\_by\_model. Observation: 02d06e138ec09045d9d29bd8793e9341366d3f7e1e0fcf8fab59a752b3991b15. Source text hash: a8904fb26d08e12cfd8c78a9a285c2873f2b0dda356b30e2eb3e161bf416b047. ### uncertain — 2026-11-07T15:04:47.307Z — anthropic/claude-opus-5.5 Publication: d1a8b33c-e18d-3ab6-7969-b01c6db0d527 attribution — pass: The reading correctly attributes the post to Henry Dyer and Michael J. Fleming, published in the New York Fed's Liberty Street Economics. Its findings are framed as the authors' reports and conclusions. The text is a single analytical post, not a listing. > Henry Dyer and Michael J. Fleming, “Treasury Market Liquidity Since April 2025,” Federal Reserve Bank of New York Liberty Street Economics summary — uncertain: The summary faithfully reflects the post's arc and caveats. However, its central terms go unexplained and the definitions list is empty: liquidity, bid-ask spread, order book depth, price impact, interdealer market and high-frequency data. A non-specialist reader cannot tell what a liquidity worsening means in practice. Smallest repair: add the source's own plain definition of liquidity, quoted here, and one-line glosses or term-library tooltips for the three measures. The question is a fair, open issue. > We define market liquidity as the cost of quickly converting an asset into cash (or vice versa). date — pass: The stated publication date of April 2, 2026 matches originalPublished and the page dateline. The reading presents nothing later as part of the original and makes no forecast. The Iran reference is integrated into the body and concerns events before publication, so it reads as original even though the page was modified on April 17. The source is a publisher page, so no archive disclosure is needed. > April 2, 2026 Treasury Market Liquidity Since April 2025 support — pass: Each claim matches its quoted text: the worsening and quick improvement, the three measures from interdealer data, the uses of the Treasury market, the best level since 2021, the continued-watching conclusion, and the sample ending in February 2026. The cited passages form the core body of the post, not apparent later additions, despite the April 17 modification. The scope limitation is accurate. > Treasury market liquidity warrants continued close watching media — pass: No media was selected and no verified candidates were supplied, so no media identity or relevance issue arises. ## Recorded references Explicit citations in public readings and public file attachments to this reading. Shared topics are not citations. Other artifact types need an explicit reference adapter. No public references recorded here yet. [Reference data (JSON)](/readings/de345343b9d50771d833de5c8cafb5b015182694e21bba682b5b4e15b0784012/references.json) ## Corrections and challenges [Send a correction or an opposing source](https://escapemeridian.com/corrections/) [JSON record](https://escapemeridian.com/readings/henry-dyer-and-michael-j-fleming-report-in-liberty-street-de345343.json)