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Liquidity Warnings Are Reaching Crisis Levels

Published on April 20, 2025

Jordi Visser

It was another pivotal week for the markets—one that marks a potential tipping point for the global financial system.

While headlines remain focused on the tariff negotiations, what’s happening beneath the surface is more urgent: liquidity has dried up across the capital structure. U.S. Treasuries—long considered the safest and most liquid asset—are now struggling to absorb even modest selling. Market depth has collapsed. Loans and junk issuance has stalled.

👉 Watch this week’s video where I break down what this means for markets going forward:
Rev Up the Printing Press: Liquidity Warnings Are Reaching Crisis Levels

Treasury Secretary Bessent highlighted the issue on Monday in an interview where he opened the possibility of off-the-run Treasury buybacks. The pressure on the administration now extends beyond liquidity, as the consequences of the tariffs are about to show up in the upcoming hard economic data. Leaders in global trade statistics are highlighting a sudden and sharp drop-off in trade over the last few weeks. Meanwhile, market expectations for inflation over the next three months have risen significantly, and small business voices are growing louder about the threats to their survival.

In the event that these pressures lead to an off-ramp, I also walk through the most important developments of the week in AI and the rise of stablecoins—two forces that will help shape the next phase of the digital economy.

Timestamps:

00:00 – Markets Reach an Inflection Point
Liquidity dries up. Deleveraging accelerates. Treasury volatility can become systemic risk.

03:23 – Treasury Buyback Signals and the Printing Press
Scott Bessent hints at new policy tools. Officials are preparing to inject liquidity.

05:27 – The Treasury Market Freezes
Bid-ask spreads widen. Credit markets stall. Bond issuance grinds to a halt.

14:07 – A Looming Treasury Auction Crisis
The U.S. must issue $10 trillion this year—without enough buyers or market depth.

24:41 – Labor Market Masking Weakness
Gig work and structural shifts are hiding recession signals from traditional metrics.

30:19 – Inflation, Politics, and Approval Ratings
Sticky inflation adds to political pressure. Approval is slipping, and time is running out.

34:13 – AI’s Relentless Momentum
Despite the chaos, AI investment continues. Google, Nvidia, and others aren’t slowing down.

38:03 – Bitcoin Outperforms the Magnificent 7
As faith in traditional assets wanes, Bitcoin’s resilience and independence shine through.

39:04 – Stablecoins and the Global Undercurrent
Dollar-backed stablecoins are reshaping global finance, opening access to billions.

Watch here: https://youtu.be/FH4iI9M-cEE

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