In recent years, more than half of reported interdealer broker trading in nominal Treasury debt, on average, took place in on-the-run securities, even though off-the-run issues outnumbered on-the-run issues
more than twenty to one.
The government will buy back the off-the-run issues and offer on- the-run bonds with high liquidity, while increasing the on-the-run issues
through the extension of fungibility from one year to two years.
On-the-run Treasuries generally became relatively more valuable as investors sought not only the safety of Treasury securities but also the liquidity of the on-the-run issues
in the so-called flight to liquidity.