Yes this has always been an issue, e.g. number 10 below is from a FOMC meeting in 1953 but could've been written this year. More generally, could argue since the 1694 founding of BoE central banks have been concerned with managing the money market impact of government funding...

"TIC data appear to severely undercount Cayman-domiciled hedge funds' holdings of U.S. Treasuries by around $1.4 trillion as of the end of 2024...underreporting of Cayman Islands Treasury holdings in TIC is likely a result of collateral transfers" federalreserve.gov/econres/notes/…

🇺🇸 Fed note showing that foreign holdings of US Treasuries by Hedge Funds in the Cayman Islands are massively under-reported, largely driven by the basis trade. This means that TIC data are wrong, but also national accounts overstating households holdings as a result.

Very happy to share I've been promoted to Principal Economist at the Board!

👀 indeed

Highly levered hedge funds play an important role as intermediaries in Treasury markets nowadays, absorbing 37% of issuance, much more important than we thought. Great forensic finance work by Jay Kahn and co-authors. and excellent write-up by Robin Wigglesworth

Seeing some renewed guessing about who holds the long duration in Treasury futures, the other side of trades like basis trades. No need to guess! We mapped it out in detail in our earlier paper. 👇