A recent report from China International Capital Corporation (CICC) paints a concerning picture of global liquidity as simultaneous bond auctions by the U.S. and Japan cool down, accompanied by rising interest rates. The report suggests that this trend points towards a tightening of financial markets. CICC predicts insufficient liquidity in the Japanese yen, a key currency for financing, could exacerbate market volatility. Additionally, concerns are growing over President Trump’s upcoming debt resolution plan which, if passed, could lead to an increase in new U.S. Treasury debt issuance between July and September. This is likely to further tighten U.S. markets and pose risks of systemic liquidity shocks. Given these developments, the Federal Reserve’s urgent need for actions like quantitative easing and balance sheet expansion policies to stabilize market conditions becomes clearer.