Fixed Income Market Structure Compendium

Report Highlights

A Conversation with Coalition Greenwich:

Volumes – For Treasuries, $900B ADV became the new normal given market structure and macro trends, with uncertainty driving volatility. For corporates, ADV averaged over $50B, driven more by macro vs. volatility (relatively low).
Electronic trading – Treasuries <60% total volume; IG corporates ~50%, HY ~33%.
Surprise – For Treasuries, the focus on the dealer-to-dealer market last year for e-trading. For corporates, portfolio trading was a big story but not a new story.
Trends – On market liquidity, it is hard to think that a Treasury market routinely trading over $1T a day has a liquidity problem. Also, the push towards workflow automation continues to grow as AI was injected into the conversation.

Market Themes:

Treasury Clearing – First deadline September 2025 (recently extended one year by the SEC; timeline in this section). Not a big bang, rather a phase in as participants already changing behavior. Aggregate clearing volume expected to reach $11.5T daily, up from ~$9T peak in 2024.
Treasury Issuance – $2.4T in 2024, compared to <$1T pa historically. Issuance skewed to shorter durations, in contrast with Treasury’s (under the last administration) goal.
Federal Debt – Debt held by public $28.3T in 2024, total debt $35.5T (includes intergovernmental debt due). Interest $1.1T in 2024.
Treasury Holders – The composition of Treasury holders has shifted: Fed 16.5%, foreign 33.0%, other 50.1%. The demand shift to price sensitive investors raises concerns about Treasury take-up and also increases term premiums, elevated at 69 bps, after dropping to almost zero in early September 2024.

Market Metrics (2024 average, Y/Y change):

Total – issuance $10.5T, +25.6%; ADV $1.3T, +19.6%; outstanding $46.9T, +5.7%.
UST – issuance $4.7T, +32.8%; ADV $907.9B, +19.4%; outstanding $28.3T, +7.2%.
Corporates – issuance $2.0T, +30.2%; ADV $51.6B, +21.1%; outstanding $11.2T, +4.4%.

Katie Kolchin, CFA, Managing Director, Head of Research
Matthew Paluzzi, Research Associate