Wellington Asset Management shifts from US Treasuries to German bonds after Fed meeting

One of the world’s largest fixed-income investors just made a statement about where it thinks the smart money should be parked. And it’s not in Uncle Sam’s IOUs. Wellington Asset Management reduced its US Treasury holdings and rotated into German bonds and other European government debt following the Federal Reserve’s July 29 FOMC meeting. The move, led by portfolio manager Martin Harvey, touches roughly $6 billion in the firm’s World Bond Fund and reflects a broader recalibration across Wellington’s global fixed-income strategies. What the Fed did, and why Wellington didn’t like it The FOMC voted 9-3 on July 29 to hold the federal funds rate steady at 3.5% to 3.75%. Three dissenting members pushed for a rate hike, a split that reveals real tension within the committee about how aggressively to fight inflation. Harvey, who oversees approximately $35 billion in total assets across Wellington’s fixed-income book, trimmed Treasury exposure and went overweight on European bonds, with a particular emphasis on German government debt. His concern centered on the Fed’s ability to combat inflation effectively under Chair Kevin Warsh. Why Germany, specifically Harvey described European gover...