With an interest rate announcement from the US Federal Open Market Committee looming large on Wednesday, hedge funds have ramped up their short bets against US Treasuries, according to a report by Bloomberg.

The report cites the latest data from the Commodity and Futures Trading Commission (CTFTC) as revealing that an increase in short position by hedge funds against 2-year futures. Traders are also reportedly continuing to pay a higher premium for protection against the risk of a bigger seed-off in 10-year note futures. 

Block trade activity in five-year note futures has continued to be robust over the past week, although the latest JPMorgan Treasury client survey indicates that's some investors have been starting to aggressively cover short positions.