{"id":283854,"date":"2026-10-01T13:29:25","date_gmt":"2026-10-01T07:59:25","guid":{"rendered":"https:\/\/univest.in\/blogs-2\/?p=283854"},"modified":"2026-10-01T13:29:25","modified_gmt":"2026-10-01T07:59:25","slug":"hedge-funds-us-treasury-market","status":"publish","type":"post","link":"https:\/\/univest.in\/blogs-2\/hedge-funds-us-treasury-market\/","title":{"rendered":"Hedge Funds Hold a Record 7% of the US Treasury Market: How the Treasury Basis Trade Could Hit India If They Sell"},"content":{"rendered":"

Hedge funds hold $2 trillion of US Treasuries, a record 7%. US 10-year yield 5.23%. India 10-year 7.18%. Basis trades reportedly down 20% in 2026.<\/em><\/p>\n

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Quick Answer<\/strong><\/p>\n

Hedge funds now hold about $2 trillion of cash Treasuries, a record 7% of the US Treasury market, nearly triple the level of five years ago, according to the US Treasury’s Office of Financial Research. Much of that sits in leveraged basis trades funded in the repo market, which is why regulators warn that margin calls could force fast selling. If many funds sold together, Treasury prices could fall, yields could jump and borrowing costs could rise from Washington to Mumbai. For now, Fed data shows hedge funds stayed net buyers through the second quarter.<\/p>\n<\/p><\/div>\n

Hedge funds have become one of the biggest buyers in the roughly $30 trillion US Treasury market, the pool of government debt that sets the price of money around the world. Their buying has grown while Treasury yields climbed to the highest level since 2007, which is why the question of what happens if hedge funds sell US Treasuries has moved from academic to urgent.<\/p>\n

This guide explains why hedge funds hold so much of the US Treasury market, how the Treasury basis trade works, how leverage and margin calls could trigger forced selling as they did in March 2020, and what a sell-off would mean for Indian investors through liquidity, the rupee and foreign flows. Figures come from the Office of Financial Research, Fed data and market reports, so recheck them before you act.<\/p>\n

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