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Stock Bulls Hope Record Hedge Fund Bond Short Is Wrong
According to the most recent available positioning snapshot, hedge funds pushed an already historic Treasury short to new extremes just prior to a renewed bout of US regional banking turmoil last week.
Indeed, the overall short in Treasury futures has grown every week for two months, in what counts as the longest stretch in half a dozen years.
That could've presaged a painful experience given the rollercoaster in rates. Assuming those bets were directional (as opposed to, say, the other leg of
Such short position implies a view the 2022 regime would make a come back, last year it made a lot of sense to short treasuries, this year that bet rests on a much more nebulous macro (not to mention the political calculus of congressional GOP members), gutsy call but if I were a hedge fund manager I would take the other side of that gamble.