Hedge funds have been on the wrong side of the Treasury market, at least lately. According to Bloomberg, they extended their short positions on Treasuries to a record high just before smaller-than-expected U.S. bond sales and disappointing job data ignited a bond market rally.
U.S. long-dated Treasury notes posted their most impressive week since early January 2023, in a bond rally triggered by a combination of factors, including the Federal Reserve’s decision to keep interest rates steady and a surprising slump in employment growth last month, which fueled speculation of potential rate cuts in 2023.
