Shifting Liquidity Dynamics a Potential US Equity Headwind

n this April 2025 Strategist’s Corner, MFS’s Robert Almeida explores how tightening liquidity conditions and macro headwinds may reshape equity performance, especially in the U.S. market.

• Elevated trading volumes in April contrast with diminished liquidity, amplifying volatility and exposing vulnerable assets.  
• U.S. equities have long benefited from post-GFC tailwinds—low rates, globalization, and stimulus-fueled liquidity—but these are now turning into headwinds.  
• Liquidity-driven outperformance is fading, and higher-duration U.S. tech stocks are increasingly sensitive to liquidity shocks.  

Read the full report for insights into how shrinking liquidity and global policy shifts could alter long-term equity strategy.