Hedge funds hold about $2 trillion in US Treasuries and may need fewer bonds
Hedge funds held an estimated $2 trillion in US Treasury cash bonds at the end of 2025, roughly 7% of marketable US debt, per the Office of Financial Research. Much of that buying supports trades that profit from small price gaps between bonds and derivatives, and their next trade could require fewer bonds.
Why it matters
- Hedge funds are a large holder of US Treasuries, which ties them closely to the bond market.
- Much of their bond buying is linked to trades that aim to profit from small price gaps.
- A shift in these trades could change demand for US government debt, a key macro driver.
What to watch next
Watch for new Office of Financial Research data and any signs that hedge funds are reducing their Treasury holdings or basis trade activity.
