Hedge Funds' Record Treasury Holdings Raise Systemic Risk Concerns

Hedge funds now hold a record 7% ($2 trillion) of the $30 trillion US Treasury market, nearly tripling their holdings in five years 🔗. This surge, while helping fund government debt, raises concerns among experts about potential systemic risk due to hedge funds' aggressive leverage 🔗.

Key points:

• Hedge funds' share of marketable Treasury debt reached 7% by end of 2025, continuing to grow in H1 2026 🔗.
• Experts warn that forced deleveraging in extreme situations could lead to broader liquidity and financial stability events 🔗.
• This comes as 10-year and 30-year Treasury yields hit multi-year highs 🔗.