Gundlach Warns Record Treasury Shorts Risk Pain on Squeeze
- DoubleLine Capital CIO sees risk of Treasuries short squeeze
- Net short speculative positions hit highest on record
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A giant of fixed-income markets is warning that a build-up of speculative short positions in the U.S. Treasuries market is setting those traders up for pain ahead.
Net short positions on 10-year Treasuries from hedge funds hit the highest level on record, according to the latest data from the Commodity Futures Trading Commission. For Jeffrey Gundlach of DoubleLine Capital LP, the extreme nature of that positioning has raised the risk of a possible short squeeze, where an increased appetite for U.S. bonds forces bearish investors to cover their bets.