Despite ongoing confusion about the catalyst behind the recent sell-off in U.S. Treasuries, experts are pointing to a potential explanation – the unwinding of ‘basis trades’. According to Felipe Villarroel, a portfolio management partner at TwentyFour Asset Management, this involves traders selling U.S. Treasuries to meet margin calls on leveraged positions. These trades aim to capitalize on slight price differences between U.S. Treasuries and U.S. Treasury futures or interest rate swaps. However, the resulting surge in trading volume triggered a chain reaction, leaving many bonds searching for new buyers who were hesitant to step in during one of the most volatile weeks in recent history.