“There is ample liquidity to buy and sell U.S. corporate bonds, a group of New York Federal Reserve economists found, dismissing worries that tougher regulations could threaten some investors’ ability to sell their holdings amid market turmoil. Citing narrow bid-ask spreads and a low price impact from trades worth $100 million, the economists said their finding was ‘remarkable’ given the diminished role that Wall Street dealers have taken in making markets for corporate bonds. Dealers’ inventory of corporate bonds has plunged since the financial crisis to roughly a quarter from its peak of about $400 billion. Meanwhile, companies have been issuing U.S. corporate bonds at a record pace.”
http://www.reuters.com/article/us-usa-corporatebonds-fed-idUSKCN0RZ1RE20151005
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