Small Group Of Hedge Funds Wields Dominance In US Treasury Market: 'A Concentration Of Vulnerability Has Built Up,' IMF Warns
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The International Monetary Fund (IMF) has raised concerns about a small number of hedge funds that now hold significant control over the U.S. Treasury futures market. These highly leveraged funds have concentrated short positions in Treasury futures, which could pose systemic threats to the financial stability of the U.S. and global economy. The IMF warns that some of these funds may have become systemically important to the Treasury and repo markets, and any liquidity problems they encounter could ripple through the broader financial system. Nearly half of all two-year Treasury futures positions are held by fewer than eight traders, and just eight hedge funds control about 30% of the market for longer maturities. The IMF projects that the U.S. debt-to-GDP ratio will continuously climb from 122% in 2023 to nearly 134% by 2029. Hedge funds are exploiting the need for the U.S. Treasury to issue a substantial amount of bonds to refinance maturing debt and cover the deficit.
#HedgeFunds #UsTreasury #FinancialStability #Imf #ShortPositions
https://markets.businessinsider.com/news/etf/small-group-of-hedge-funds-wields-dominance-in-us-treasury-market-a-concentration-of-vulnerability-has-built-up-imf-warns-1033263990
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2024-04-19 00:28:35
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2024-04-19 00:28:35Event JSON
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"content": "Small Group Of Hedge Funds Wields Dominance In US Treasury Market: 'A Concentration Of Vulnerability Has Built Up,' IMF Warns\n==========\n\nThe International Monetary Fund (IMF) has raised concerns about a small number of hedge funds that now hold significant control over the U.S. Treasury futures market. These highly leveraged funds have concentrated short positions in Treasury futures, which could pose systemic threats to the financial stability of the U.S. and global economy. The IMF warns that some of these funds may have become systemically important to the Treasury and repo markets, and any liquidity problems they encounter could ripple through the broader financial system. Nearly half of all two-year Treasury futures positions are held by fewer than eight traders, and just eight hedge funds control about 30% of the market for longer maturities. The IMF projects that the U.S. debt-to-GDP ratio will continuously climb from 122% in 2023 to nearly 134% by 2029. Hedge funds are exploiting the need for the U.S. Treasury to issue a substantial amount of bonds to refinance maturing debt and cover the deficit.\n\n#HedgeFunds #UsTreasury #FinancialStability #Imf #ShortPositions\n\nhttps://markets.businessinsider.com/news/etf/small-group-of-hedge-funds-wields-dominance-in-us-treasury-market-a-concentration-of-vulnerability-has-built-up-imf-warns-1033263990",
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