Is the Market Underpricing Inflation? Vanguard Thinks So
The post Is the Market Underpricing Inflation? Vanguard Thinks So appeared on BitcoinEthereumNews.com. Vanguard Asset Management is buying insurance against stickier US inflation after an oil-market gauge, the crack spread, reached a 2022 high. The firm’s active funds team opened a long position in short-dated inflation-protected Treasuries. It is betting that markets underprice the risk that price pressures linger longer than expected. An Oil-Market Signal Bond Investors Rarely Watch The crack spread measures the difference between the prices of refined fuels and the crude oil used to make them. It is a typical metric for oil traders. For bond investors, it barely registers. However, the crack spread has widened to its highest level since 2022. Crude has slumped since the fragile US-Iran ceasefire. Gasoline has fallen, but has not matched the drop. At the same time, jet fuel, diesel, and fuel oil are also behaving differently in relation to oil prices. It is worth noting that elevate