Amundi Buys US Treasuries as Global Yields Hit 5%

The 10-year U.S. Treasury yield reached 5% on September 14, mirroring similar surges in the United Kingdom and Australia. This volatility is driven by Brent crude oil prices climbing to $107 a barrel due to Middle East hostilities and an ongoing war in Iran, which analysts warn could target commercial shipping and energy infrastructure before the U.S. mid-term elections.

Amundi SA, Europe's largest asset manager, is responding by purchasing two-year US Treasuries to hedge against a potential economic growth slowdown. The firm is shifting back toward developed markets and long duration after previously holding short positions. Senior portfolio manager Nicolas Dahan noted that if the Federal Reserve is forced to rethink its tightening path due to slowing growth, these sensitive two-year yields would likely fall.

Market expectations for a Federal Reserve interest rate hike at the September 15-16 policy meeting have risen to 80% on Polymarket, a trend supported by revised forecasts from Goldman Sachs following August inflation data. Meanwhile, Citadel Securities predicts a divergence between U.S. and European markets. The firm argues that while the U.S. is better equipped to handle higher rates due to its domestic energy industry and AI investment boom, Europe remains more vulnerable to stagflation and energy shocks.