- Bank of England deputy governor for financial stability Sarah Breeden said hedge funds' growing presence in core government bond markets makes a shock spreading across markets greater than before.
- The IMF's Global Financial Stability Report, published Tuesday, warned that hedge fund leverage and crowded trades amplify stress in turmoil, with spillovers into banks' prime brokerage businesses. Hedge fund gross assets stand at about $13 trillion.
- Hedge funds held a record 7% of the $30 trillion Treasury market at the end of 2025, according to U.S. Office of Financial Research data published Aug. 19.
- Earlier in October, 10-year and 30-year U.S. Treasury yields hit their highest levels since 2002, and 10-year UK gilt yields touched multi-decade highs. French OAT yields rose sharply on fiscal outlook concerns.
Quotes
“It's increasingly hedge funds, and those hedge funds are price-sensitive, leveraged, international.”
“The source of the shocks are bond markets, and the likelihood of a spillover is higher than it was”