Hedge funds become permanent fixtures in the U.S. Treasury market as traditional buyers retreat
By
The Economist
Summary
The article discusses the enormous scale of the U.S. Treasury market, where $1 trillion in securities trade daily and trillions more are used as collateral. It highlights that as traditional buyers (banks, central banks, insurers, pension funds) show dwindling interest, the market increasingly relies on hedge funds and other risky investors to maintain liquidity. The piece frames hedge funds as a permanent fixture in this market, despite the risks involved, comparing the strategy to "collecting pennies in front of a steamroller."
Source
bskyHedge funds become permanent fixtures in the U.S. Treasury market as traditional buyers retreatecon.stKey quotes
· 3 pulledSome $1trn in securities change hands each day.
Trillions more are used as collateral for short-term loans.
Collecting pennies in front of a steamroller
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