As the coronavirus crisis keeps markets in a chokehold, liquidity has gotten tight.

US Treasury bonds are normally the most liquid asset in the world, meaning they can be converted into cash so quickly that they are cash-like. Under normal circumstances, Treasuries are “the gold standard for liquidity,” said John Bellows, portfolio manager at Western Asset Management.

But things look quite a bit different in the new coronavirus normal: investors have now grown concerned about the liquidity in bond markets.

“The demand for cash is causing investors to sell their Treasuries,” Bellows said.

In line with that, the 10-year Treasury bond headed lower on Wednesday, with its yield moving back above 1.1%. Bond prices and yields move in opposite directions to each other.

The sold Treasuries then pile …continued .
[Original Source: CNN]