More than $30 trillion of U.S. Treasury debt is outstanding. Yet the newest Treasury securities less than 4% of the amount outstanding account for about 65% of average daily trading volume. Why does age matter so much? When a new Treasury issue appears, the previous benchmark becomes off the run. Its promised cash flows haven’t changed. But its market has. In the 2 year sector, the on-the run note averaged about $56.3 billion in daily trading volume in the New York Fed’s July 2017 June 2024 sample. The first off the run averaged just $5.5 billion. Same government. Similar maturity. Very different liquidity. And the difference becomes visible in transaction costs effective spreads rose from 0.66 basis points for the on the run 2 year to 1.22 for the first off the run and 2.23 for the second. The deeper lesson: Liquidity isn’t a property of an asset alone. It’s also a property of how the market uses it. #FixedIncome# #MarketStructure# #Trading# #Finance#