Wall Street’s biggest bond houses are jettisoning Treasury bonds and stepping out on the risk curve instead.

Treasury holdings among the 18 primary dealers that trade directly with the Federal Reserve reversed to a net short position of $10.5 billion last month from a record net long position of $93.6 billion in June, according to Fed data cited by Bloomberg.

That’s the fastest turnaround since the Fed began compiling the numbers in 1997. So the bond houses clearly aren’t afraid of risk, despite the fragile economic recovery.

“It’s money going back to work again in some level of riskier assets,” Donald Galante, chief investment officer of fixed income at MF Global, told Bloomberg.

“Panic has receded and you are in a more normal world, with dealers starting to take on a little bit more leverage. They are taking on some inventory in the corporate world and hedging with Treasuries again.”

To be sure, August’s net short position of $10.5 billion was nothing compared to the average net short of $63 billion in the 10 years before the collapse of sub-prime mortgage loans in 2007.

But on balance, “dealer behavior in the fixed-income market has begun to return to normal,” Joseph Abate, a money-market strategist at Barclays Capital, told Bloomberg.

Not everyone sees the trend continuing.

Gold could rise as high as $1,250 an ounce next year if risk appetite falters, Nick Bullman, managing partner of hedge fund Bullman Investment Management, told Reuters.