The Federal Reserve’s more rapid exit from crisis-era policies is set to place the $24tn US government bond market under extra strain, heightening concerns about the bedrock of the global financial system.

The ease with which traders can get deals done in the Treasury market has declined to the lowest levels since the early days of the pandemic in March 2020, according to a Bloomberg index. Gaps between prices where traders buy and sell have yawned wider and huge moves in price, on a scale unthinkable even a year ago, have become commonplace.

The Fed is this month accelerating the pace of winding down the nearly $9tn balance sheet it built up for more than a decade in an effort to cushion the economy from shocks. It aims to shrink the total by $95bn a month — double the August pace.