Researchers at the Federal Reserve Bank of New York have argued that spikes in volatility and sudden declines in liquidity have become more frequent in both Treasury and equity markets. 7 The Commodity Futures Trading Commission also points out that flash events are more common now.
8 Market participants suggest that the rapid growth in high-frequency trading in equity, foreign exchange, and U.S. Treasury markets, along with broader concerns about less resilient liquidity, potentially explains these flash events.