Why hedge funds could be making a bond market shock more likely

LONDON, ENGLAND - JULY 7: Deputy Governor for Financial Stability, Sarah Breeden, attends the Bank of England financial stability report press conference at Bank Of England on July 7, 2026 in London, England. (Photo by Doug Peters - WPA Pool/Getty Images)Wpa Pool | Getty Images News | Getty ImagesHedge funds' increased presence in global bond markets makes the likelihood of a broader market shock "greater than what it was," Bank of England deputy governor Sarah Breeden told CNBC Thursday.Breeden — the central bank's deputy governor for financial stability, and a member of its rates-setting Monetary Policy Committee — said the changing mix of bond market investors, and their increased use of leverage, raises the risk of localized market turbulence turning into broader financial stress."One of the things that has become increasingly apparent over the last several years is that the investors in our core government bond markets globally have changed," Breeden told CNBC's Sri Jegarajah in an interview Thursday."It's not the real money investors, the insurance companies and pension funds, in the way it used to be. It's increasingly hedge funds, and those hedge funds are price-sensitive, ...