As the price of equities and debt plummeted, reports of illiquidity in key financial markets emerged.1 In the United States, the Federal Reserve responded with a variety of interventions aimed at different markets within the financial sector. In this note, we attempt to shed some light on recent trading conditions in one such market: the market for US corporate bonds.
Corporate Bond Liquidity During the COVID-19 Crisis
The COVID-19 virus has wrought havoc on the global economy. In mid-March, as both the scope of the pandemic and the duration of its effects became apparent, financial markets around the world entered a period of turmoil.