Hedge funds in the Cayman Islands held more Treasuries at end-2024 than US official data show, with their ownership likely to be $1.4 trillion higher than reported, according to researchers at the Federal Reserve.

The funds’ holdings had increased by $1 trillion since 2022 to reach $1.85 trillion by end-December, the researchers including Daniel Barth and Daniel Beltran wrote in an Oct. 15 note. A report from the Department of the Treasury put the funds’ ownership at $423 billion.

The Fed researchers said their figures showed the Cayman Islands is the largest foreign owner of US government securities, ranking ahead of China, Japan and the UK.

Emphasis mine.

Also my own editorializing: Those hedge funds are likely leveraged somewhere between 50:1 and 100:1.

So uh… all good, totally normal, lol.