Hedge Fund Bets and Treasury Basis Trade: BIS Warns of Potential Turmoil

The Bank for International Settlements (BIS) has warned that hedge fund bets on US Treasuries could potentially lead to market turmoil. The BIS expressed concerns over the high levels of leverage used by hedge funds, which could amplify any sudden shifts in market sentiment. The warning comes as hedge funds have been increasing their positions in US Treasuries, betting on rising yields. The BIS emphasized the need for market participants to closely monitor and manage potential risks associated with these bets.