Hedge funds are shorting the dollar Bessent just tried to save

Barclays says its hedge fund clients have been selling dollars all August, with the pace accelerating after Treasury Secretary Scott Bessent doubled long-bond buybacks to roughly $4 billion per operation, a move Bloomberg's FX desk flagged as effectively quasi-QE. The mechanism is straightforward: buying back 10- to 30-year Treasuries pushes yields down and floods the system with dollars, and options markets now show the richest premium for dollar puts over calls since February. The dollar index has already dropped to its lowest since mid-May. Bessent designed the buybacks to fix the bond market. Hedge funds are betting he broke the currency instead.