Hedging in: Pedestrians walk past the New York Stock Exchange in New York. The potential that hedge funds will amplify treasury swings adds to worries about the resilience of the US13.3 trillion debt market. – Bloomberg
NEW TORK: Hedge funds are crowding into US treasuries, and that has bond traders bracing for more turbulence.
While the Federal Reserve doesn’t break out hedge-fund ownership, a group seen as a proxy increased its holdings to a record US$1.27 trillion in the past year, according to a quarterly report released by the central bank this month. That came as foreign central banks and finance ministries, the biggest buy-and-hold owners in recent years, culled their investments for the first time on an annual basis since 2000.
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