Vanguard Buys Short-Dated Treasuries on Inflation Risk as Gasoline-Crude Gap Hits Highest Since 2022
Updated
Updated · Bloomberg · Jul 10
Vanguard Buys Short-Dated Treasuries on Inflation Risk as Gasoline-Crude Gap Hits Highest Since 2022
3 articles · Updated · Bloomberg · Jul 10
Summary
Vanguard is buying short-dated US Treasuries as a hedge against stickier-than-expected US inflation, according to Ales Koutny, who oversees international rates in its active funds.
The move follows an unusual oil-market signal: gasoline prices have fallen, but not nearly as fast as crude after the fragile US-Iran ceasefire.
That mismatch has pushed the gasoline-crude crack spread to its widest level since 2022, a sign refined-product prices could rise again and feed through to inflation.
Vanguard is using that spread as an early warning gauge for inflation pressure, positioning in the front end of the Treasury market for a scenario where price growth proves harder to tame.