Driving Forces Behind the $25 Trillion Treasury Market Buying Spree

Households and hedge funds are increasingly investing in the Treasury market as yields on short-term bills and longer-dated bonds rise. The Federal Reserve's interest rate hikes have attracted both individual investors and hedge funds, leading to a surge in their share of Treasury purchases. Despite the bond selloff, households have bought around $1.5 trillion of Treasury debt, with an estimated 3.6 million new accounts opened on TreasuryDirect last year. Meanwhile, the Federal Reserve's share of the Treasury market has decreased as it raised interest rates and reduced its balance sheet.