is a high liquidity premium a good thing 
a high liquidity premium means something cannot be easily sold for cash the higher premium means it should offer a greater long term return however in some cases giving up flexibility may not be worth it finding the right balance between yield and liquidity is key can you have a negative liquidity premium yes it s possible to have a negative liquidity premium this can occur when the yield curve inverts meaning longer term bonds offer less yield than short term ones this is uncommon and investors often view it as a sign that the wider economy is not faring well 