Is There Such a Thing As a “Liquidity Crisis”?

Photo by Charles "Duck" Unitas on Unsplash

Lately, there’s been talk about a so-called “liquidity” crisis brewing or potentially brewing in the Treasury (bond) market; however, I am not yet convinced that there is an issue, let alone a “crisis”.

For one, what is a “liquidity” crisis? What does that term mean? Because depending on what you mean, it’s far from clear that there is–or even could in principle be–an issue…