Global Liquidity Concerns Rise Amid U.S. and Japan Bond Auctions

According to PANews, a recent report by China International Capital Corporation (CICC) suggests that the simultaneous cooling of U.S. and Japanese bond auctions, along with rising interest rates, may indicate a tightening of global liquidity. The report highlights that the insufficient liquidity of the yen, a key financing currency, could exacerbate the simultaneous decline in U.S. stocks, bonds, and the dollar. The report further warns that with the impending passage of U.S. President Donald Trump's 'one big beautiful bill,' the resolution of the U.S. debt ceiling issue may lead to a concentrated issuance of new U.S. debt by the Treasury between July and September. This could increase the risk of systemic liquidity shocks in the U.S. market. Consequently, the urgency for the Federal Reserve to implement quantitative easing and other balance sheet expansion policies to stabilize the market is growing.