Vanguard is strategically increasing its Treasury bond holdings, taking advantage of higher yields that have risen above 4.3% due to the ongoing Middle East conflict. The asset manager's active fixed-income group noted that 10-year yields have surged more than 30 basis points since late February, driven by concerns over inflation and rising oil prices. Sara Devereux, Vanguard's global head of fixed income, emphasized that yields above 4.25% present attractive opportunities for extending bond duration and enhancing portfolio resilience against potential growth risks. Following a recent easing of pressures in the energy market, Vanguard is optimistic about the Federal Reserve potentially implementing one rate cut this year, a scenario not fully reflected in the interest-rate swaps market. In credit markets, the firm continues to favor investment-grade bonds, citing solid fundamentals and strong demand, while cautioning investors to be selective amid wider dispersion across sectors and issuers.