Primary Dealers Flip to Record Net Short on U.S. Treasuries
- Primary dealers have gone net short on U.S. government debt they once held billions of dollars of, the first time in recent history, according to Bloomberg's Credit Weekly — a striking structural shift in who is willing to warehouse Treasuries.
- The move comes as two-year yields climbed to their highest since February 2025 on oil-fueled inflation bets, and traders wrestle with a backdrop of good-for-dollar, bad-for-bonds dynamics (Bloomberg).
- The positioning flip raises fresh questions about depth of the Treasury market at a time when banks are also absorbing a $250B-plus AI bond boom, with investors testing their limits on duration and credit risk.