Huw Pill, chief economist at the Bank of England, warned that bailout mechanisms introduced by central banks to prevent market collapse are inadvertently subsidizing government borrowing, boosting systemic leverage, and may interfere with the transmission of monetary policy. Pill described this predicament as a “whack-a-mole”: “Ironically, vulnerability is created by mechanisms introduced to reduce vulnerability.” Hedge funds' holdings of US Treasury bonds have swelled from $600 billion a decade ago to $2.4 trillion. At present, this cycle has entered a new stage of leveraging accumulation, and all parties have yet to find an effective way to break the game.

Huw Pill, chief economist at the Bank of England, warned that bailout mechanisms introduced by central banks to prevent market collapse are inadvertently subsidizing government borrowing, boosting systemic leverage, and may interfere with the transmission of monetary policy. Pill described this predicament as a “whack-a-mole”: “Ironically, vulnerability is created by mechanisms introduced to reduce vulnerability.” Hedge funds' holdings of US Treasury bonds have swelled from $600 billion a decade ago to $2.4 trillion. At present, this cycle has entered a new stage of leveraging accumulation, and all parties have yet to find an effective way to break the game.