Vanguard Buys Dollars Saying Fed Rate-Cut Bets Gone Too Far
- Firm closed short position on the greenback built in July
- Ales Koutny expects a quarter-point rate cut on Wednesday
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Vanguard, one of the world’s biggest asset managers, is buying the dollar this week on the view that market bets on Federal Reserve interest-rate cuts are overdone.
The firm, which has $1.7 trillion in actively managed funds, closed a short position on the greenback that it opened in July because it expects the Fed’s easing cycle to be less aggressive than markets are pricing. That’s regardless of whether policymakers reduce rates by a quarter or a half point later on Wednesday, according to Ales Koutny, head of international rates at Vanguard.