Vanguard Scoops Up Treasuries as Iran Conflict Lifts Yields

Vanguard is boosting its holdings of Treasuries, taking advantage of higher yields following the Middle East conflict to lock in rates and hedge against the risks of a potential growth slowdown.

In the asset manager’s latest quarterly outlook, its active fixed-income group said it has been adding exposure to longer-rated bonds as 10-year yields rose above their estimated “fair-value” range of 3.75% and 4.25%. The benchmark rate, which steers everything from corporate borrowing costs to mortgage terms, has climbed more than 30 basis points to around 4.3% since late February, as the Iran conflict drove oil prices higher and reignited inflation concerns.