Over the past four years, hedge funds have doubled their footprint in the U.S. debt market, making the Cayman Islands — where many hedge funds are officially based — the place where the most U.S. debt outside the United States is held, according to the Fed. Typically, people flock to Treasuries for safety in times of crisis. Yet, driven in large part by hedge fund activity, the Treasury market went through unusual turbulence during recent shocks, including the onset of the Covid-19 pandemic in March 2020 and President Trump’s “Liberation Day” tariff announcement in April 2025.

And this:

By the early 2010s, these foreign governments made up over 40 percent of Treasury holdings, excluding those the Federal Reserve held. That was up from just over 10 percent in the mid-1990s…Foreign governments now make up less than 15 percent of the overall Treasury market.

Here is more from Geng Ngarmboonanant at the NYT.