Breeden warns of shock risk

Bank of England deputy governor Sarah Breeden told CNBC Thursday that hedge funds' increased presence in global bond markets makes a broader market shock more likely than before.

“the likelihood of a shock in one market transmitting to another is greater than what it was”

Who now owns government bonds

The mix of bond market investors has changed significantly. Insurance companies and pension funds have given way to hedge funds that are price-sensitive, leveraged, and international.

“It's increasingly hedge funds, and those hedge funds are price-sensitive, leveraged, international.”

Hedge fund assets reach thirteen trillion

Hedge funds now hold about thirteen trillion dollars in gross assets, making them an increasingly important part of the global investor landscape, according to the IMF.

IMF warns of leverage and crowding

The IMF's Global Financial Stability Report, published Tuesday, warned that hedge funds' use of leverage to boost returns and tendency to pursue crowded trades could amplify market stress during turmoil.

Record hedge fund share of Treasurys

Hedge funds held a record seven percent of the thirty trillion dollar Treasury market at the end of twenty twenty-five, according to U.S. Office of Financial Research data published August nineteenth.

Bond yields hit multi-decade highs

Earlier this month, ten-year and thirty-year Treasury yields hit their highest levels since two thousand two. Across the Atlantic, yields on UK gilts and French OATs also touched multi-decade highs.