Tariff fears trigger hedge fund unwind and yield spike

The searing selloff in Treasuries this week in response to tariffs caused dislocations in the world’s biggest bond market, as hedge funds unwound some debt-fuelled bets and investors raised concerns about lasting damage to US markets.

While the market participants, who include brokers, traders and investors, said the selloff was orderly, indicators such as bid-ask spreads — or the difference between buyers’ and sellers’ asks — were widening on Wednesday.