Hedge funds held $2 trillion in cash Treasurys at the end of 2025, equal to a record 7% of the $28.9 trillion marketable Treasury market, according to the U.S. Treasury Office of Financial Research. Their holdings were nearly triple their level five years earlier as traditional long-term investors, including pension funds, reduced exposure. The funds' growing role comes amid sustained Treasury-market selling pressure: the 10-year yield was near 5.234% on Tuesday and the 30-year yield was 5.549%, while Tressis chief economist Daniel Lacalle said he preferred U.S. technology assets and gold over government bonds. Hedge funds commonly use leveraged basis trades, buying cash Treasurys and selling futures, leaving the market vulnerable to forced selling if volatility rises or lenders demand more collateral.