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Hedge Funds Find Futures Twice As Nice
In what is being seen as a $35 billion gamble, hedge funds are joining other speculators that the Federal Reserve is done raising interests.
In what is being seen as a $35 billion gamble, hedge funds are joining other speculators that the Federal Reserve is done raising interests, and are grabbing up twice as many Treasury securities with the hope that rates will go up than holding positions thinking they’ll go down “There’s clearly a growing camp of investors who feel the Fed’s done, and the next move is going to be an ease,” Woody Jay of Greenwich, Conn.-based Rock Ridge Advisors told the Bloomberg News. According to the Commodities Futures Trading Commission commitment of traders report, in the five-day period ending Aug. 22 hedgies and other speculators held more than 675,000 long positions, betting 10-year Treasury notes will rise, as oppose to about 327,500 who held short position thinking they’ll decline. According to Bloomberg News, Tudor Investment Corp and Citadel Investment are two big players in this field, based on the fact that they are required to report to the government their above-threshold positions. Not everyone expects the surge up, however. The so-called “commercials,” hedgers that usually include bond fund managers (but do not include hedge funds), set a record for short positions during that same five-day period ending Aug. 22 with nearly 1.5 million contracts, as they look for Treasuries to fall.