Basis Trade Helps Mask Who Owns $1.4 Trillion Of Treasuries

Authored by Masaki Kondo via Bloomberg,

Hedge funds in the Cayman Islands held more Treasuries at end-2024 than US official data show, with their ownership likely to be $1.4 trillion higher than reported, according to researchers at the Federal Reserve.

The funds’ holdings had increased by $1 trillion since 2022 to reach $1.85 trillion by end-December, the researchers including Daniel Barth and Daniel Beltran wrote in an Oct. 15 note.