Dealer capacity tightened significantly in March – Fed research

Financial data

The ability of US primary dealers to intermediate in the Treasuries market tightened significantly in March, while demand for liquidity soared, new research from the Federal Reserve finds.

Dealers’ balance sheet capacity, which economist Jonathan Goldberg calls “dealers’ liquidity supply”, contracted by $100 billion, or 17%, in March.

That is the fifth-largest percentage decline in liquidity supply since Goldberg’s underlying data began in 1990, and is roughly the same as that following the

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