Amundi Bets on Growth Slowdown with Two-Year Treasury Buy

Amundi SA, one of the world's largest asset managers, is buying up two-year US Treasuries as a hedge against a potential growth slowdown. The move comes after a sharp selloff in bond markets in early September, driven by oil prices surging to a four-month high due to escalating tensions in the Middle East.

The firm's Group CIO, Vincent Mortier, flagged the firm's appetite for one- to two-year bonds back in April. The September selloff appears to have offered the kind of entry point Amundi was waiting for.

Rising oil prices act like a tax on consumers and businesses alike, eroding spending power and squeezing margins. If this dynamic persists long enough, economic growth slows. And when growth slows, central banks eventually cut rates, sending bond prices higher.