# Michael J. Fleming argues in Liberty Street Economics that Treasury liquidity bears watching [Canonical reading](https://escapemeridian.com/readings/michael-j-fleming-argues-in-liberty-street-economics-that-d643c097) Michael J. Fleming’s post was published November 12, 2025. He reports that Treasury market liquidity briefly worsened around the April tariff announcements, while its relationship with Treasury volatility remained similar to the past. Bid-ask spreads widened, order book depth fell, and price impact rose in April, then recovered as volatility declined. Fleming explains that volatility can lead market makers to widen spreads and post less depth to manage the risk of taking positions. His comparison finds that the relationship between liquidity and volatility was consistent with the historical association; he says liquidity was not unusual given volatility. Still, Fleming argues that liquidity bears close watching: it matters to the market’s uses, has faced periodic disruptions, and faces growth in Treasury debt outstanding amid limited dealer capacity. He says it remains to be seen how these developments and policymakers’ measures will affect market functioning and liquidity. 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: Nov 12, 2025 (2025-11-12T12:00:00.000Z). Date basis: Date supplied by the publisher’s feed. Added to Escape Meridian: 2026-11-10T05:03:28.216Z. First observed: 2026-10-30T18:55:58.374Z. Retrieved: 2026-10-30T18:57:50.224Z. - [How Has Treasury Market Liquidity Fared in 2025?](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Limits Text as retrieved on October 30, 2026; originally published November 12, 2025. ## Open question How will growth in Treasury debt outstanding amid limited dealer capacity affect Treasury market functioning and liquidity? ## Source-stated Michael J. Fleming reports that Treasury market liquidity briefly worsened around the April tariff announcements, while its relationship with volatility was similar to the past. > We find that liquidity briefly worsened around the April 2025 tariff announcements but that its relation to Treasury volatility has been similar to what it was in the past. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated Fleming reports that the three liquidity measures worsened in April and subsequently recovered. > Bid-ask spreads then narrowed after the April 9 announcement that the new tariffs were mostly being postponed - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated Fleming explains that volatility can prompt market makers to widen spreads and post less depth to manage risk. > Volatility causes market makers to widen their bid-ask spreads and post less depth to manage the increased risk of taking positions. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated Fleming says liquidity was not unusual given volatility, but remains important to watch because of periodic disruptions and growth in Treasury debt amid limited dealer capacity. > Although U.S. Treasury market liquidity has not been unusual given the level of volatility, it still bears close watching. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated Fleming leaves open how Treasury debt growth, dealer capacity, and policymakers’ measures will affect market functioning and liquidity. > It remains to be seen how these various developments will affect market functioning and liquidity. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated The post is dated November 12, 2025. > November 12, 2025 > How Has Treasury Market Liquidity Fared in 2025? > Michael J. Fleming - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-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: 75055954-2ac0-302b-e729-f530e985a9bd. Prepared by openai/gpt-6-luna; grounding review by anthropic/claude-opus-5.5. Source check: uncertain by anthropic/claude-opus-5.5 on 2026-11-10T04:58:38.841Z. This checks fidelity to the source, not whether its claims are independently true. Editorial selection: accept; reasons: bridge\_admitted\_by\_model. Observation: a9c11c5b69ad07c0ac3bf017cab9d5bead28bb2f9d57e311860e12a9b62962ca. Source text hash: cbc5f6deafbc0318db662debe74275aeee70fc5be6741d198cce084b8b9c9a7f. ## Revision and source-check history ### Version 1 — 2026-11-10T05:03:28.216Z Michael J. Fleming’s post was published November 12, 2025. He reports that Treasury market liquidity briefly worsened around the April tariff announcements, while its relationship with Treasury volatility remained similar to the past. Bid-ask spreads widened, order book depth fell, and price impact rose in April, then recovered as volatility declined. Fleming explains that volatility can lead market makers to widen spreads and post less depth to manage the risk of taking positions. His comparison finds that the relationship between liquidity and volatility was consistent with the historical association; he says liquidity was not unusual given volatility. Still, Fleming argues that liquidity bears close watching: it matters to the market’s uses, has faced periodic disruptions, and faces growth in Treasury debt outstanding amid limited dealer capacity. He says it remains to be seen how these developments and policymakers’ measures will affect market functioning and liquidity. ## Original source Federal Reserve Bank of New York · Article Original source date: Nov 12, 2025 (2025-11-12T12:00:00.000Z). Date basis: Date supplied by the publisher’s feed. Added to Escape Meridian: 2026-11-10T05:03:28.216Z. First observed: 2026-10-30T18:55:58.374Z. Retrieved: 2026-10-30T18:57:50.224Z. - [How Has Treasury Market Liquidity Fared in 2025?](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Limits Text as retrieved on October 30, 2026; originally published November 12, 2025. ## Open question How will growth in Treasury debt outstanding amid limited dealer capacity affect Treasury market functioning and liquidity? ## Source-stated Michael J. Fleming reports that Treasury market liquidity briefly worsened around the April tariff announcements, while its relationship with volatility was similar to the past. > We find that liquidity briefly worsened around the April 2025 tariff announcements but that its relation to Treasury volatility has been similar to what it was in the past. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated Fleming reports that the three liquidity measures worsened in April and subsequently recovered. > Bid-ask spreads then narrowed after the April 9 announcement that the new tariffs were mostly being postponed - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated Fleming explains that volatility can prompt market makers to widen spreads and post less depth to manage risk. > Volatility causes market makers to widen their bid-ask spreads and post less depth to manage the increased risk of taking positions. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated Fleming says liquidity was not unusual given volatility, but remains important to watch because of periodic disruptions and growth in Treasury debt amid limited dealer capacity. > Although U.S. Treasury market liquidity has not been unusual given the level of volatility, it still bears close watching. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated Fleming leaves open how Treasury debt growth, dealer capacity, and policymakers’ measures will affect market functioning and liquidity. > It remains to be seen how these various developments will affect market functioning and liquidity. - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-2025/) ## Source-stated The post is dated November 12, 2025. > November 12, 2025 > How Has Treasury Market Liquidity Fared in 2025? > Michael J. Fleming - [Supporting source](https://libertystreeteconomics.newyorkfed.org/2025/11/how-has-treasury-market-liquidity-fared-in-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: 75055954-2ac0-302b-e729-f530e985a9bd. Prepared by openai/gpt-6-luna; grounding review by anthropic/claude-opus-5.5. Source check: uncertain by anthropic/claude-opus-5.5 on 2026-11-10T04:58:38.841Z. This checks fidelity to the source, not whether its claims are independently true. Editorial selection: accept; reasons: bridge\_admitted\_by\_model. Observation: a9c11c5b69ad07c0ac3bf017cab9d5bead28bb2f9d57e311860e12a9b62962ca. Source text hash: cbc5f6deafbc0318db662debe74275aeee70fc5be6741d198cce084b8b9c9a7f. ### uncertain — 2026-11-10T04:58:38.841Z — anthropic/claude-opus-5.5 Publication: 75055954-2ac0-302b-e729-f530e985a9bd attribution — pass: The reading correctly attributes the analysis to Michael J. Fleming in a Federal Reserve Bank of New York Liberty Street Economics post. It presents his findings as his reports and arguments, not as established fact. > Michael J. Fleming is head of Capital Markets in the Federal Reserve Bank of New York’s Research and Statistics Group. summary — uncertain: The summary is faithful, but central terms go unexplained and no definitions are supplied. A general reader is not told what liquidity means; the source defines it as the cost of quickly converting an asset into cash. Bid-ask spread, order book depth, price impact and market makers are also unexplained. The reading omits why the Treasury market matters, which the source states: government financing, monetary policy and use as a safe asset. Smallest repair: add the source's plain definition of liquidity, brief glosses or term-library tooltips for the three measures, and one sentence on the market's uses. > Market liquidity can be defined as the cost of quickly converting an asset into cash (or vice versa) date — pass: November 12, 2025 matches the post dateline and the UTC day of originalPublished. The kind is publisher-page, so no archive disclosure is required. The reading uses no later material and frames no hindsight. The April events are dated at the source's precision. > November 12, 2025 How Has Treasury Market Liquidity Fared in 2025? support — pass: Each claim matches the source: the brief April deterioration, the recovery in all three measures, the volatility mechanism, the consistency with the historical relationship, and the reasons for continued watching. The open question follows from the source's stated ongoing challenge and its explicit uncertainty. No unsupported benefits or costs are implied. > faces the ongoing challenge of growth in Treasury debt outstanding amidst limited dealer capacity media — pass: No media was selected, and no verified media candidates were supplied, so nothing is misidentified or irrelevant. ## 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/d643c097025b9077152a4c3f4213ea3b9c1eaf921cd2dc15b3045a844357e6e1/references.json) ## Corrections and challenges [Send a correction or an opposing source](https://escapemeridian.com/corrections/) [JSON record](https://escapemeridian.com/readings/michael-j-fleming-argues-in-liberty-street-economics-that-d643c097.json)