Morgan Stanley estimated in a September 24 report that hedge funds' U.S. Treasury cash-futures basis trade positions, financed through borrowing, have decreased by 20% this year to approximately $1.2 trillion. The bank noted that despite the reduction in position size, it did not observe widespread signs of market stress related to this basis trade at the time. Federal Reserve researchers, in a study published in June this year, estimated the basis positions for September 2025 at $830 billion. This trading strategy aims to profit from small price discrepancies by buying U.S. Treasuries and selling futures, with most funds borrowed through repurchase agreements to amplify returns. However, this strategy faces risks such as short borrowing terms versus long trade unwinding periods, as well as potential liquidity pressure from rising financing costs or increased margin requirements.