Investors Fear Another Big Blowup of Basis Trade as Treasuries Lose Haven Status

An unnerving development is starting to unfold as President Donald Trump’s trade war hammers financial markets: US Treasuries, far from offering shelter from the turmoil, are suddenly losing their haven appeal.

For James Athey it’s bringing back memories of the basis-trade unwinds at the onset of the pandemic — when widespread deleveraging sparked blowups of the popular hedge fund strategy that sent bonds tumbling.

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