Hedge funds are trading: we expect chaos in the markets

Hedge funds are trading: we expect chaos in the marketsThe US national debt is growing at a rate of approximately one trillion per quarter and has exceeded $33 trillion for the first time in history. By 2030, this figure could reach $50 trillion. even with the recent bipartisan agreement to cut costs.The Treasury market is one of the most popular in the world because it determines the cost of borrowing within the U.S. government debt, with about $750 billion changing hands every day in August, according to Sifma data. Excessive bets from hedge funds can break the fragile market balance.The reference rate is commonly used by hedge funds that employ relative value strategies involving a long position in the spot market and a short position in the futures market, funded through repurchase agreements.This quarter alone, the Ministry of Finance auctioned bonds worth $1 trillion. Meanwhile, borrowing costs have risen sharply over the past year and a half as the Fed wages an aggressive campaign to tighten monetary policy. But the sharp increase in the supply of new US debt is not the only problem.Leverage in futures has now increased: 70 times for 5-year Treasuries and 50 times for 10-year bonds. This is slightly lower than before the COVID-19 pandemic, but if investors do not receive high enough real interest rates, they will simply get rid of these securities.So if the market now takes the risk of going against highly leveraged futures investors, a reduction in leveraged Treasuries positions will trigger a spontaneous sell-off in the market.Are you ready to sell American debt?Profits to yall!#ForexChief #Treasuries #stocks #Market #forexnews #Fed #worldnews