Morgan Stanley estimated that Treasury cash-futures basis positions fell 20% this year to about $1.2 trillion, according to September 24 reports. According to NS3.AI, hedge funds finance these trades through borrowing that can expire before the positions pay off. Morgan Stanley said it had not found evidence of broad basis-related market stress at that point. The bank noted that a decline in positions alone cannot distinguish orderly exits from forced selling, and that replacement buyers may demand higher yields, which could raise government borrowing costs even without a market breakdown.