Credit markets are experiencing heightened volatility as benchmark yields rise significantly amid a risk-unwind phase, with credit spreads widening by 170 basis points. Concerns are growing over the movement in swap spreads, which have reached alarming levels, prompting speculation that traders may be selling U.S. Treasuries (USTs) to meet margin calls rather than reducing exposure to risk assets. Additionally, there are indications that banks may be hesitant to warehouse USTs, contributing to a decline in Treasury prices. The front-end of the Treasury curve has surged, with the 2s-10s curve steepening the most since the March 2023 banking crisis. The 30-year SOFR swap spreads are nearing negative 100 basis points, signaling liquidity concerns in the Treasury market and potential hoarding by banks. This situation is raising alarms for borrowers, as swap spreads reflect a complete meltdown, with some analysts suggesting panic hedging by pension funds may be at play.