Bonds
Catalyst Quant Fund Shorts 10-Year Treasuries as Macro Bet
- Strategy is buying Treasury bills to take advantage of yields
- US government borrowing also likely to pressure bonds: Miller
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A top-performing quant fund is shorting five- to 10-year US Treasuries on expectations that interest rates will stay on hold this year as prices remain elevated.
The Catalyst/Millburn Hedge Strategy Fund is selling Treasury futures while buying short-dated bills. The positions reflect a view that markets may be overestimating the chances of a rate cut by the Federal Reserve, while potentially overlooking the pressure on longer-dated yields from a ballooning US deficit.