PIMCO

We believe the Fed is on a path to continue to cut rates over the next several meetings to realign monetary policy with a now more “normal” U.S. economy.

Balanced risks to inflation and employment indicate it’s time for the Fed to normalize interest rates, enhancing a positive backdrop for bonds.

China's economic transformation presents both challenges and opportunities for global markets.

In his annual Jackson Hole speech, Fed Chair Powell assessed the post-pandemic U.S. economy and suggested rate cuts are coming soon.

In this PIMCO Perspectives, we explore the dispersion playing out across monetary policy and financial markets.

The central bank’s latest policy statement and Chair Jerome Powell’s remarks suggest that an initial interest rate cut could come as soon as September.

While the European Central Bank kept policy rates unchanged, the next cut is likely to be delivered soon.

In the post-pandemic fiscal landscape, government debt trajectories may be volatile, but appear broadly sustainable.

A second straight month of encouraging U.S. core CPI data supports an initial Federal Reserve rate cut as early as September.

Comparing public fixed income and private credit markets involves weighing factors related to liquidity, transparency, credit quality, risk premium, and opportunity costs.

Good news on U.S. inflation in May did not sway the Federal Reserve to signal interest rate cuts could come sooner.

While the European Central Bank cut policy rates by 25 basis points to 3.75% on its deposit facility, the trajectory beyond June remains unclear.

The global economy continues to recover from pandemic aftershocks, including trade dislocations, outsize monetary and fiscal interventions, a prolonged inflation surge, and bouts of severe financial market volatility. At PIMCO’s 2024 Secular Forum, we explored how the aftereffects of those disruptions are producing some unexpectedly positive developments while introducing longer-term risks.

April’s U.S. inflation report likely offers some comfort to Federal Reserve officials, but rate cuts are unlikely until we see a more substantial deceleration in inflation.

With the potential for higher-for-longer yields across countries, we see the global fixed income opportunity set as the most attractive in years.

In this PIMCO Perspectives, we examine how the return of elevated bond yields comes at an opportune time to consider shifting out of cash.

Shifting dynamics among global economies and markets present a range of opportunities for multi-asset portfolios.

Despite the reacceleration of inflation and enduring labor market strength, the Fed remains focused on downside risks.

Various methods to estimate this key bond market gauge differ on details but appear to signal rising investor compensation.

While the European Central Bank refrained from declaring victory at its April meeting, a June rate cut seems increasingly likely.

The March U.S. inflation report and other macro data will likely prompt a change in the Federal Reserve’s trajectory in 2024.

The global investment landscape is set to be transformed in the months ahead as the trajectories of major economies diverge more noticeably.

After two volatile years, we believe conditions are especially compelling for fixed income.

Recent signals from major central banks suggest challenges ahead with easing monetary policy amid above-target inflation.

The Bank of Japan (BOJ) has bid farewell to its negative interest rate policy (NIRP), yield-curve control (YCC) and quantitative and qualitative easing (QQE), marking the end of an era of extraordinary monetary easing.

Federal Reserve officials appear locked in for multiple rate cuts this year, despite inflation reaccelerating – raising questions about the speed and timing of this easing cycle.

While market pricing looks more reasonable, European Central Bank rate cuts, which could commence in June, are unlikely to be delivered as aggressively as the market expects in 2024.

This PIMCO Perspectives assesses how the term premium’s 40-year downturn could start to reverse.

OPEC+ strategies and geopolitical tensions could roil markets.

Adding real assets to a stock and bond portfolio can help boost returns and smooth volatility when inflation runs above 2%.

Debt levels will likely continue to rise absent policy changes, and the yield curve is likely to steepen.

Many investors remain in cash, but we think it’s time to shift exposure to bonds.

The Federal Reserve sees progress on inflation, but wants more certainty before it’s prepared to lower the policy rate.

While interest rates have presumably peaked, we remain skeptical that rate cuts will be delivered as forcefully as the market expects.

Municipals experienced their strongest two-month performance since 1986 during the final two months of 2023.

There are material short- and long-term implications for hydrocarbon markets following the COP28 meeting in Dubai, including tailwinds to oil.

Municipal bonds posted their best performance of the year, and we believe municipal credit conditions remain strong.

Starting portfolio yields may be a better guide to optimal spending than knowledge of future market returns.

The market anticipates a swift shift in the Fed cycle.

While the ECB is unlikely to raise rates further, we remain skeptical that it will deliver rate cuts as early as the market expects.

The dearth of homes for sale has underpinned the housing market’s surprising resilience and may further lift home prices despite reduced affordability.

As banks pull back from many types of lending, demand for capital is outpacing supply, providing the best potential opportunities in private credit since the GFC.

U.S. inflation cooled more than expected, and bond markets rallied, but the Fed is likely to remain in a long pause.

In our 2024 outlook, bonds emerge as a standout asset class, offering strong prospects, resilience, diversification, and attractive valuations compared with equities.

Tighter financial conditions prompted Federal Reserve officials to take a step back from data dependence, and suggest a higher bar for future hikes.

Volatility and uncertainty seem to be on the horizon, and though many investors are eager to park in cash and money markets, opportunities exist that can protect client wealth and bring in a better return. Short-Term bonds are a potential defensive play.

Join the experts at PIMCO for a webcast that explores the current market environment and looks at strategies that take advantage of the front-end of the curve.

The latest inflation report raises the odds of further Federal Reserve action.

Our September Cyclical Forum was the first to be held in London, where the economic situation today reflects what’s happening around the world.

“Restrictive for longer” is now the mantra as monetary policymakers seek to bring inflation reliably to target.

The spike in bond yields presents an opportunity for fixed income investors to earn capital gains and diversify portfolios.

A liquidity gap is growing as banks curtail specialty lending, providing specialty finance investors opportunities for potential better risk-adjusted returns than we’ve seen since the GFC.

Public credit markets offer high quality investments with attractive yields and downside resilience, while we see growing longer-term opportunities in private markets.

The Federal Reserve forecasts only a modest uptick in U.S. unemployment next year as inflation cools, but history and current labor market trends make us less certain.

The European Central Bank is likely at or very near its peak policy rate, but we don’t expect rate cuts in the near term.

PIMCO’s Global Advisory Board discusses economic and geopolitical factors shaping the long-term global outlook.

We believe idiosyncratic credit events may occur over the next 12 months, but systemic bank risk is remote.

We believe idiosyncratic credit events may occur over the next 12 months, but systemic bank risk is remote.

The Fed chair’s high-profile speech emphasized the central bank’s focus on taming inflation.

Commodities stand to benefit from underinvestment and the clean energy transition.

We see compelling value in high-quality, liquid fixed income assets that may offer potential resiliency if the economy weakens.

The sovereign credit rating cut is unlikely to significantly change views toward U.S. Treasuries, but questions about debt sustainability may grow louder over time.

The Bank of Japan announced changes that could allow its yield curve control program to expire gradually if economic conditions are favorable.

Amid an outlook for slower growth and more moderate inflation, the Fed shifts to data dependence.

High-quality fixed-income assets may offer the best return potential in more than a decade along with diversification benefits as a likely recession approaches.

After stubborn U.S. inflation in the first half of 2023 kept the Federal Reserve raising rates, June’s softer inflation report suggests July may mark the end of the hiking cycle.

Debt-financed fiscal policy is driving much of today’s high inflation, but as pandemic-era measures fade, central banks will likely return to their key role in managing price levels.

The European Central Bank (ECB) hikes rates and signals more tightening ahead.

Our long-term outlook for commercial real estate investing argues for a flexible, long-term approach to seize opportunities in debt and equity investments across the real estate landscape.

The Federal Reserve paused in June but raised its estimates for the policy rate later this year. We expect a July increase but remain skeptical about subsequent hikes.

The European Central Bank (ECB) hikes rates and signals more tightening ahead.

The Federal Reserve paused in June but raised its estimates for the policy rate later this year. We expect a July increase but remain skeptical about subsequent hikes.

State and local tax revenues sank in April, yet we believe most governments have strong fiscal positions, with ample reserves and budget flexibility to manage the decline.

With their ability to act as an inflation hedge, diversified, and return enhancer, commodities should be considered an important portfolio allocation over the long term.

The first few years of the 2020s have seen a number of acute economic, financial, and geopolitical disruptions on a worldwide scale, and it will take time for the ultimate consequences of these shocks to be fully felt.

An in-depth analysis of hedge fund performance demonstrates that, over the past 15 years, lower-beta hedge fund styles have generally achieved higher alpha, aligning with investors' objectives of maximizing returns and diversification.

Despite economic uncertainty, we see compelling value in high-quality, liquid assets that we view as more resilient in the face of a potential recession.

Although affordability remains an obstacle, recent data offer reasons to be more constructive as broader conditions still appear supportive of home prices.

An allocation to fixed income may help investors navigate a potential recession as well as uncertainty around the Federal Reserve’s policy trajectory.

Higher bond yields and improved total return potential may offer advisors a compelling opportunity to move cash off the sidelines.

March inflation data may put the Federal Reserve close to its terminal policy rate this cycle, if it hasn’t already reached it.

History suggests the lagged economic effects of tighter central bank policy are arriving on schedule, but any eventual normalizing or even easing of policy will still likely require inflation to decline further.

Slower credit growth may curtail broader U.S. economic growth, taking pressure off the Federal Reserve.

In a dovish move, the central bank raises rates by half a point.

The failure of Silicon Valley Bank raises questions for Fed policy and economic growth.

Strength in employment and inflation has caused markets to raise the implied terminal rate while still expecting the Fed to normalize policy – which is different from easing – in 2024.

Bond markets are pricing in additional Federal Reserve interest rate hikes, acknowledging the central bank’s emphatic resolve to tame inflation despite the likely trade-offs.

U.S. inflation may not be moderating as quickly as many were expecting.

After withstanding a multitude of global challenges last year, emerging markets look poised for improvement as inflation recedes and the path of monetary policy comes into view.

The European Central Bank raised its policy rate, and more hikes are coming.

Investors face mixed signals between the Federal Reserve’s policy guidance and recent economic developments.

As investors seek to pinpoint market expectations for Federal Reserve policy, it’s critical to consider not just rate projections and derivatives pricing, but the degree of uncertainty and distribution of outcomes.

Focusing on high quality and liquidity when taking risk in portfolios will be key in 2023, as pressure on monetary policy remains intense.

After enduring one of the worst years on record across asset classes, investors should find more cause for optimism in 2023, even as the global economy faces challenges.

The European Central Bank is likely to continue hiking rates next year, but the end point remains uncertain.

Falling prices for cars and holiday discounting contributed to softer U.S. inflation, creating more room for the Fed to potentially dial back its hawkish stance.

A multi-real-asset strategy may help plan participants preserve and grow purchasing power, enhance portfolio diversification, and mitigate inflation risks.

How we’re thinking about investing against a backdrop of inflation uncertainty, geopolitical tension, and likely recession.

A split U.S. Congress in 2023 will likely limit fiscal policy, but could be positive for equity markets.

With interest rates higher amid a challenging macro environment, we see a compelling case for bond allocations and are cautious about higher-risk investments.

Core inflation came in below expectations for October and should moderate in 2023, but likely with bumps in the road ahead.

Inflation is receding and real interest rates are climbing in EM after a year of tightening monetary policy.

The Federal Reserve’s November statement included dovish language, but Fed Chair Powell warned investors not to expect the Fed to stray from its full focus on fighting inflation.

The central bank noted that substantial progress has been made in withdrawing monetary policy accommodation, and expressed concerns around growth and policy transmission lags.

Core inflation in the U.S. outpaced expectations for September and may fortify the Federal Reserve’s hawkish resolve.

The OPEC+ plan to curb oil production complicates the global economic, inflation, and geopolitical outlook and will likely lead to higher prices for key commodities.

This is a critical time for investors and policymakers alike.

U.K. financial market volatility is likely to remain high, and the longer-term outlook likely depends on future monetary and fiscal policy.

The Federal Reserve released new economic projections suggesting interest rate hikes will be faster and larger than previously forecast.

We believe short-dated bonds can offer attractive yields, flexibility, and a means to proceed cautiously as central banks continue to raise interest rates.

The Federal Reserve may be pressured to target a higher terminal fed funds rate as it seeks to tame U.S. inflation expectations following strong price rises in August.

Widening participation in the Fed’s standing repo facility and bond buying programs could mitigate another liquidity crisis in the Treasury market.

Emerging market valuations appear attractive, but country-specific risks can be critical to monitor amid global inflation and rising interest rates.

In Jackson Hole, Federal Reserve officials unequivocally emphasized their commitment to bringing inflation under control – even as the U.S. economy slows.

The value of completion mandates for defined benefit plans depends on the stage of the de-risking journey.

The market contraction presents better opportunities than we’ve seen in years to generate income, which we balance against the need for resilience in the face of a potential recession.

As the European Central Bank leaves negative policy rates behind, attractive valuations herald a much-improved total return potential.

PIMCO’s Global Advisory Board discusses the longer-term outlook for geopolitics, inflation, and other macro themes.

Despite price declines in many sectors, the Federal Reserve may continue its hawkish approach.

The Federal Reserve affirmed its commitment to price stability, hiking its policy rate 75 basis points again and signaling more tightening to come.

Renewed growth in China’s manufacturing activity, coupled with softening developed market demand, should ease some supply-side pressures – but several other inflation risks remain prevalent.

June’s U.S. CPI (Consumer Price Index) inflation data likely set alarms blaring in the minds of Federal Reserve officials.

June’s U.S. inflation data will likely force central bankers into more restrictive territory – raising the odds of recession.

Amid stormy markets, senior securitized credits hold potential for resilient returns.

We examine key themes from our review of advisor fixed income portfolios over the past year.

To celebrate Pride Month, four PIMCO executives share their perspectives on inclusion and diversity in the workplace and the importance of visible representation.

The varied responses of individual countries to global inflationary pressures have contributed to elevated real-rate differentials between developed and emerging markets.

The war in Ukraine has widened global geopolitical fractures, and we see risks of deglobalization and more fragmented capital markets over the secular horizon.

The proliferation of semiconductors throughout our economy may drive more durable, less cyclical demand and earnings.

Research Affiliates discusses the intriguing long-term outlook for value stocks, and provides insights on the models that underpin its asset class forecasts.

Rising yields, wider spreads, and heightened market volatility are providing an attractive environment, but caution in credit selection is warranted.

Heightened market volatility has led to misconceptions about credit, in our view. We dispel four of them here.

Higher yields, wider credit spreads, and other common market reference metrics suggest relative valuations for muni bonds have become attractive.

We assess risks and potential opportunities for multi-asset portfolios amid late-cycle dynamics, higher inflation, rising interest rates, and geopolitical uncertainty.

The Bank of Canada embarked on a swift tightening path, but secular forces still weigh on the longer-run interest rate outlook.

Sanctions on Russia’s foreign currency reserves will likely stymie the rise of the Chinese renminbi as a competitor to the U.S. dollar.

Five commercial real estate sectors in markets across the globe have the potential to thrive in this environment.

The countries’ weight in global trade is relatively small, but outsize exports of raw and semi-finished goods may portend price hikes across a variety of industries.

While Beijing has set an ambitious growth target this year with a generous fiscal stimulus plan, new COVID-19 waves are adding to mounting headwinds amid a slowing global economy.

A framework for optimizing liquidity in alternative investments.

Supply chains set to become less dependent on China over time.

Home price fundamentals suggest appreciation will slow but remain resilient.

Their track record in periods of rising interest rates suggests municipal bonds could be well-positioned for this year’s market environment.

Russia’s invasion of Ukraine, the sanctions response, and the gyrations in commodity markets cast an even thicker layer of uncertainty on what already was an uncertain economic and financial market outlook before the onset of this horrific war.

The pandemic hastens the evolution of the DC plan landscape and challenges plan sponsors to evolve.

The U.S. Federal Reserve raised the policy rate at the March meeting and signaled more hikes to come given the risks from high inflation.

Russia’s invasion of Ukraine and the world’s subsequent sanctions and actions to curtail Russia’s access to the global financial system have thrown financial markets into turmoil.

PIMCO’s glide path for target date funds expresses the firm’s collective view on age-appropriate asset allocation that can help prepare defined contribution (DC) plan participants for successful retirements.

Restructured debt has often outperformed the broader municipal bond market as issuers emerge from bankruptcy with higher debt-servicing capacity.

Research Affiliates discusses their approach to managing risks and targeting opportunities in uncertain environments.

Commodities appear attractive amid elevated inflation, lingering supply-demand imbalances and high roll yields.

As uncertainty pervades the markets, we are positioning defensively, increasing liquidity and remaining nimble in an effort to generate income amid bouts of heightened volatility.

The January U.S. CPI (Consumer Price Index) report indicated a higher pace of inflation than many observers expected.

Studies of private market investments tend to focus on the return premium associated with illiquid assets and their appeal relative to traditional public market assets.

Much of the global economy has transitioned quickly from an early-cycle recovery to a mid-cycle expansion that now appears to be rapidly progressing toward late-cycle dynamics.

At the January 2022 meeting, the U.S. Federal Reserve signaled an accelerated timetable to normalize policy, but it will be a long process amid an uncertain environment.

The strong inflation report combined with employment data will likely prompt the U.S. Federal Reserve to begin hiking its policy rate in March.

Uncertainty has become an ongoing theme in markets, economies, and communities everywhere, and in this environment, PIMCO investment professionals gathered – virtually, once again – for our recent Cyclical Forum.

We see attractive investment opportunities in California’s cap-and-trade carbon emissions market.

The Federal Reserve pulls forward rate hike expectations and doubles the pace of tapering in an effort to provide more flexibility to react in 2022.

PIMCO’s Global Advisory Board discusses the longer-term outlook for macro trends and major economies.

Research Affiliates discusses the outlook for U.S. inflation expectations, and explains their business cycle model and how it informs portfolio positions.

The risks of continued elevated inflation likely have the U.S. Federal Reserve considering material changes to its policy path.

Uncertainties that caused U.S. Treasuries to rally and yield curves to undulate in November may persist and could contribute to volatility into year-end.

Disruptive trends and fatter tail risks highlight the importance of selection within asset classes and regions.

The COVID-19 crisis spurs cohesion, but fresh challenges await.

With major central banks likely to exercise patience in the face of price pressures, inflation-linked assets may be attractive allocations.

We offer our view of the most significant outcomes from the UN Climate Change Conference.

As policymakers withdraw fiscal and monetary support, we believe market volatility will rise, presenting investment opportunities.

The recent surge in oil and natural gas prices highlights the interconnected nature of energy markets, as well as the complexities of transitioning away from fossil fuels.

Stronger-than-expected U.S. inflation data in October may prompt the Federal Reserve to consider tapering faster and hiking sooner.

While the recent energy crisis has disrupted China’s economy, we do not expect a significant drag on growth.

The Federal Reserve navigated its tapering announcement without much market volatility, but faces the challenge of managing rate expectations amid elevated inflation risks.

The volatility that has roiled short-term bonds signals a shift in expectations for central bank policy in developed markets.

We believe the municipal markets should remain strong into 2022, although the good news may already be baked into high quality bond valuations.

Combining PIMCO’s innovative ESG (environmental, social, governance) investing approach with its expertise in income investing, this flexible strategy targets a multi-sector, global opportunity set.

Three transformative trends will lead the world into a radically different macro environment over the secular horizon. Read our long-term outlook and implications to consider when investing.

The Fed's more hawkish stance at September’s FOMC meeting, rising upside inflation pressures, and near-term volatility drove Treasury yields higher at the end of the month.

We do not expect widespread contagion across China’s real estate or banking sectors despite the challenging outlook.

Elevated risks to inflation expectations appear to have prompted Federal Reserve officials to revise their policy rate hike projections higher.

Elevated risks to inflation expectations appear to have prompted Federal Reserve officials to revise their policy rate hike projections higher.

The active/passive debate frequently focuses on equities, where active approaches have historically underperformed passive strategies. The story is decidedly different in the world of fixed income, where active managers can more easily exploit mispricing and other inefficiencies.

Value has its day in the sun. But are investors learning the right lessons from it?

Uncertainty always exists in financial markets.

A busy summer on the fiscal front in Washington that’s seen progress on budget and infrastructure legislation could soon give way to another showdown over the U.S. statutory debt ceiling, potentially signaling volatility for investors in the months ahead.

In this edition, Chris Brightman, chief executive officer and chief investment officer of Research Affiliates, explains their outlook on long-term inflation and discusses how investors can prepare for this risk.

There are many potential advantages to investing in tax-exempt municipal bonds, but not all advisors are aware of additional strategies and investment vehicles that can help them meet muni-focused client needs.

Just over a year ago, the biggest prevailing worry in the Canadian financial system was the risk of house prices falling in the aftermath of the COVID-19 pandemic.

Encouraging goal-oriented investing and better-balanced decisions in retirement.

In our baseline forecast, the recent decline in U.S. Treasury yields will reverse somewhat, as some of the near-term factors pressuring yields lower ebb.

With global growth rebounding amid uncertainties over inflation and COVID-19 variants, investors may want to consider a somewhat more cautious and flexible approach when seeking a consistent yield.

The Fed stopped short of providing “advance notice,” but a December tapering announcement remains likely.

Over the next 10 years, the global automotive industry is expected to face one of the most significant changes in its history – the replacement of internal combustion engine (ICE) vehicles with electric vehicles (EVs).

The global economy is in a mid-cycle expansion, following peaks in policy support and growth, and what is likely a transitory spike in inflation. We expect global growth to moderate to a still above-trend pace in 2022.

Global demand for consumer goods has rebounded since the second half of 2020, driven initially by large government stimulus packages and, more recently, by resilient capital expenditures and swift vaccination rollouts in most developed markets.

A bipartisan deal on infrastructure spending would likely be followed by a separate partisan deal funded by tax increases.

Leveraged loan issuers have lagged other fixed income market issuers in moving to SOFR as a reference rate, posing potential risks to investors as the year-end deadline approaches.

Over the past few months, economic recoveries have been uneven across regions and sectors.

Managed futures strategies have historically delivered attractive returns over the long run with low equity correlations.

A brief monthly update on what's happening in the municipal bond market.

PIMCO’s annual ESG Summit – hosted virtually this year – aimed to help participants keep pace with the rapidly evolving landscape of environmental, social and governance issues within the world of investing, with a particular focus on the transition to net-zero emissions.

Expectations for COP26, the importance of issuer engagement, and growth in sustainability-linked bonds were among the many topics covered.

Natural herd immunity in predominantly young emerging markets populations looks set to offset slower vaccine rollouts, setting the stage for a resurgence in economic growth.

In late 2020, China launched an anti-trust campaign focused mainly on big technology firms, aiming to crack down on what the government views as monopolistic practices.

We believe the U.S. is undergoing a large price-level adjustment, not shifting to a persistently higher inflation regime.

Momentum in China’s property market remains strong so far in 2021, driven by healthy demand for housing.

As regulators push to transition away from Libor, sales of Treasuries linked to the successor rate could boost the new benchmark’s credibility and expand nascent markets for related debt and derivatives.

As expected, the Federal Open Market Committee (FOMC) announced no changes to its administered rates following its April meeting, and Federal Reserve Chair Jerome Powell did not provide new information about the Fed’s bond-buying programs.

Nuclear decommissioning trusts (NDTs), the pools of money accumulated over decades used to dismantle nuclear power plants and safely dispose of radioactive materials, allocate about 40% of their assets to fixed income securities.

Since the disruptions that roiled financial markets in March 2020, investors have turned more to cash and other short-term instruments typically associated with risk aversion and preservation of capital and liquidity.

On April 21 the Governing Council of the Bank of Canada (BoC) will meet to discuss monetary policy.

Computer chips, or semiconductors, power everything from cars to consumer electronics, such as PCs, gaming consoles and smartphones.

We forecast a strong global recovery in 2021 amid significant fiscal support, accommodative monetary policy, diminishing lockdowns, and accelerating vaccinations.

Democrats could begin working on a tax bill later this year, but resulting tax hikes may be weaker and less of a headwind to growth than some fear.

The Federal Reserve on 19 March announced that the temporary changes to its supplemental leverage ratio, or SLR, will expire as scheduled on 31 March.

Following its March meeting, the Federal Open Market Committee (FOMC) released a statement and summary of economic projections (SEP).

As the latest COVID-19 relief bill winds through the U.S. Congress, some economists have been warning that too much stimulus could lead to the economy overheating

Longer-dated Treasury yields have climbed as markets consider whether economic growth and inflation expectations might accelerate more rapidly. We believe inflation pressures will remain in check and bond yields will be range-bound.

China’s economy should see a soft landing as stimulus is reduced, but the drag on global growth may place a burden on developed economies to keep stimulus taps open for longer.

One year since the inception of one of the most severe recessions in modern history, women’s engagement in the labor force is crucial to the economic recovery.

As International Women’s Day approaches, three PIMCO executives share their perspectives on diversity in the workplace.

Target date funds should be designed to reduce the risk of rash selling.

A large fiscal package geared toward pandemic relief will likely boost U.S. growth even further in 2021, but long-term inflationary risks are still balanced.

Political change, continued fiscal support will drive municipal markets in 2021, although outcomes are likely to vary.

It’s tempting these days for some investors to question the role of fixed income in portfolios. After all, real yields have plunged, potentially leading to less income today and smaller capital gains tomorrow.

A brief monthly update on what's happening in the municipal bond market.

• Tax-exempt municipal bonds generated solid performance in January, with high yield munis gaining more than 2% on the month.
• Municipal yields rose early in the month on expectations for higher rates and additional fiscal stimulus.
• Although issuance was relatively light in January, the municipal market experienced strong demand, with four consecutive weeks of fund inflows.

A clear communication strategy is crucial to managing market expectations around changes in Federal Reserve asset purchases and interest rate policy.

A holistic LDI portfolio may provide a superior liability hedge.

Despite seeing major market swings following the 2016 Brexit referendum, we don’t expect Britain’s departure from the European Union (EU) to have any major economic effects in our baseline outlook for 2021 and beyond. Far more important are COVID-19, fiscal policy, and bigger questions around future productivity growth.

A confluence of dynamics are set to accelerate global capital flows to emerging markets amid attractive valuations.

A brief monthly update on what's happening in the municipal bond market.

PIMCO’s “Income to Outcome” framework offers strategies to navigate retirement’s stumbling blocks.

Global output and demand are likely to rebound strongly in 2021, but we see risks that call for careful portfolio positioning.

With a narrowly Democratic Congress, U.S. fiscal spending is likely to increase on economic relief from the pandemic, infrastructure, and healthcare, boosting the economic rebound.

In this abridged version of our latest Asset Allocation Outlook, we discuss the opportunities and risks of investing in an early cycle recovery.

How can credit markets help active investors achieve their goals in the present low yield environment? Here are 5 ideas.

Is the 60/40 stock-bond portfolio dead? We don’t think so.

The Federal Reserve signals that monetary policy accommodation will remain firmly in place.

The U.S. stock market surged in November, erasing October’s losses even amid a rising number of coronavirus infections. Propelled by progress toward potential coronavirus vaccines and hopes for a relatively smooth transition to power for president-elect Joe Biden, major U.S. equity indices closed the month with double-digit gains.

We believe traditional fixed income should continue to provide a reliable source of diversification against a growth shock, but low rates and the risk of an inflation shock necessitate broadening the menu of diversifiers.

Some of the world’s leading countries have recently announced major sustainability targets. These moves, aimed at making economic recovery faster and more sustainable, will create investment opportunities as well.

Debt of many emerging market countries can offer robust yields and enhance portfolio diversification, provided the asset manager has the resources and sophistication to avoid potential pitfalls.

Wide performance dispersion underscores the importance of portfolio construction.

It will continue to be important to be an active investor during this period of transition and to carefully monitor the impact of policy on credit sectors.

Liquidity issues and other business risks could prompt a wave of defaults and restructurings, in turn creating fertile ground for opportunistic investing in distressed credit.

We are cautiously optimistic about economic growth over the next year, but over the longer term, disruptive factors will likely contribute to heightened volatility and lower returns across both fixed income and equity markets.

Amid an environment of near-zero benchmark and T-bill yields, for a modest increase in risk, PIMCO's short-term strategies may offer higher levels of total return and income for stepping beyond the confines of money market fund strategies.

In our view, inflation-fighting asset classes look considerably cheaper and offer higher long-term estimated returns than mainstream stocks and bonds.

A brief monthly update on what's happening in the municipal bond market.

Washington will likely focus on fiscal stimulus immediately – but given the realities of governing and the pandemic, economic recovery will take time.

Bundling may help plan sponsors unlock alpha potential and supplement low returns from long Treasury bonds.

Conventional wisdom says urban residents will flee cities in droves in response to higher taxes and the COVID-19 pandemic. But will that really come to pass?

PIMCO’s Global Advisory Board discusses the longer-term outlook for major economies and geopolitical developments.

Canada’s central bank looks to evolve its policy framework amid concern over disinflationary trends.

The pandemic has amplified four long-term macroeconomic disruptors, and fiscal policy – a key swing factor – may hold the key to upside or downside surprises. Read our long-term outlook and learn implications to consider when investing.

Policy will continue to be carefully calibrated as China walks a tightrope between supporting growth and maintaining financial stability.

A basket of emerging market bonds may offer the same appeal investors have long sought from U.S. Treasuries.

Launched in September 2020, the CFO Principles for Integrated SDG Investments and Finance are designed to help create a market for corporate SDG (Sustainable Development Goal) investments.

We believe the Fed’s mortgage purchase program is helping to bolster economic activity, and accomplishing more than Treasury purchases alone.

The lack of market reaction suggests that many investors are not convinced that the Fed’s new guidance represents any material shift in policy.

A brief monthly update on what's happening in the municipal bond market.

In a challenging year dominated by the COVID-19 pandemic, the municipal market is recovering on the strength of unprecedented federal support.

Resiliency and diversification potential remain critical in a world with meaningful uncertainty ahead.

Although the pandemic could make for a chaotic return to school, it is unlikely to create significant municipal credit stress.

Although the pandemic could make for a chaotic return to school, it is unlikely to create significant municipal credit stress.

The Federal Reserve released the results of its multiyear framework review alongside a speech by Fed Chair Jerome Powell at the Kansas City Fed’s Economic Policy Forum on 27-28 August. While the announcement came earlier than anticipated, the conclusions were in line with the evolutionary, not revolutionary, changes to the Fed’s framework we have long been expecting.

Despite reaching record highs earlier this month, gold remains attractively valued, according to our framework.

Research Affiliates discusses the increase in portfolio tactical shifts and recent research efforts supporting the All Asset strategies in today’s evolving investment environment.

A brief monthly update on what's happening in the municipal bond market.

Rising prices in July have led PIMCO to raise its core inflation forecast for 2020, but not 2021.

Looking across the global opportunity set, we see potential for attractive yield, though uncertainties surrounding the global recovery suggest this is a time to be cautious.

The Federal Reserve wants financial conditions to remain accommodative as it looks to support the U.S. recovery.

PIMCO’s CEO and its head of retirement outline the firm’s approach to generating retirement income.

European measures applied to mitigate the effects of the pandemic have contained the unemployment rate in Europe more than in the U.S. While recognizing economic risks from the rising number of COVID-19 cases in the U.S., our forecast sees this success ratio reversing before the end of the year.

Municipal bond investors will need to contend with the impact of monetary policy on market prices.

We expect more stimulus, both monetary and fiscal, will be necessary to support the recovery amid the renewed COVID-19 outbreak.

A brief monthly update on what's happening in the municipal bond market.

The protracted low-yield environment has left many investors with insufficient returns to meet their goals: how can credit help? Here we highlight where we see 5 credit opportunities.

After a decade of steady growth and rising asset prices, economies and financial markets were rocked by the COVID-19 pandemic. The global health crisis forced most governments to lock down their communities, halting economic activity almost overnight and causing financial markets to reprice lower at an unprecedented speed.

The health crisis creates opportunities to unite historically disparate investor groups to help build economic and market sustainability and resiliency.

The text book rules about where to invest following a recession may not apply in a post-pandemic world; more than bricks and mortar, stimulus efforts are green and digital now.

A brief monthly update on what's happening in the municipal bond market.

While a near-term mechanical bounce in economic activity in response to the lifting or easing of lockdown measures looks likely, we expect the subsequent climb up to be long and arduous.

We expect the Federal Reserve will continue to conduct asset purchases at its current pace through year-end, and eventually commit to keeping interest rates on hold through 2022. This should help ensure easy financial conditions and support the economic recovery.

Over diversifying an LDI manager roster may have important hidden costs.

This strategy aims to help investors participate in the ongoing recovery of the global economy, offering potential for attractive yield while managing downside risks.

A brief monthly update on what's happening in the municipal bond market....

The COVID-19 crisis is likely to accelerate many underlying, secular disruptive forces already affecting economies and financial markets. This may only increase the difference between those companies, sectors, and countries that are being disrupted, and those that are acting more like disruptors. Distinguishing between the two is becoming crucial.

The U.S. political focus has shifted to the reopening of the economy.

Research Affiliates discusses how the All Asset portfolios seek to capitalize on opportunities amid pandemic-related market volatility and a strengthening U.S. dollar.

Weak technicals are creating an opportunity in long-duration municipal bonds.

Weak technicals are creating an opportunity in long-duration municipal bonds.

Over the next several quarters, monetary conditions will likely be set not only by Fed balance sheet policies, but also by the expected path of interest rates.

A brief monthly update on what's happening in the municipal bond market.

Major economies are contracting, but extraordinary policy responses could limit severe recessions to this year.

Evidence from decades and even centuries ago, plus the unique circumstances of the current global health crisis and its economic impact, suggests we can expect a “New Neutral 2.0” of lower interest rates for longer.

The U.S. labor market disruption is the worst the country has experienced in recent memory, suggesting that the decline in overall activity could also be much more severe.

The Fed has moved aggressively to stabilize core assets, including mortgages. Yet several market indicators are still concerning.

Our baseline economic forecast is a U-shaped global recovery, but substantial unknowns remain.

The $2.2 trillion stimulus is the biggest ever, but Congress will likely be forced to do even more.

Liquidity could remain challenged, but valuations may be attractive for long-term investors.

The conditions for a relatively quick and robust rebound rest on the success in containing the virus within a reasonable horizon, and a well-calibrated economic policy response.

The Fed’s aggressive support may help keep markets functioning, hasten recovery and avoid longer-term damage.

Research Affiliates assesses the potential impact of COVID-19 on economies and investments, and what it means for the All Asset strategies.

A bolder fiscal response to the rapidly spreading coronavirus has become an economic and political imperative.

Governments and central banks have started to respond more forcefully to the health crisis, enacting policy in an effort to limit long-term damage to the global economy.

The European Central Bank (ECB) didn’t follow other major central banks and refrained from cutting interest rates in response to the coronavirus outbreak. This signals a shift in the central bank’s preferred policy tools – read more.

The Fed announced two actions Thursday in response to stress in the market for U.S. Treasuries.

As the oil surplus builds, we expect U.S. crude oil to linger at $30-$40 per barrel for the next several months.

The Bank of England and the British government both announced easing measures to counter the effects of the coronavirus on the economy – how effective can we expect these measures to be?

Fed rate cuts may be less effective at boosting the economy or markets as societies grapple with the spread of COVID-19, but other policy measures may help.

Global growth could follow a U-shaped path over the next few quarters, though substantial uncertainty remains as policymakers grapple with the impact of the coronavirus.

Senator Joe Biden is the current front-runner in a two-person race for the Democratic nomination, but upcoming state contests are crucial.

In recognition of International Women’s Day on 8 March, Cady Johnson shares her perspective on gender equality in the financial services industry.

The Federal Reserve wants to avoid a crisis of confidence.

The Fed could give the economy a powerful boost by maintaining the mix of assets on its balance sheet.

In recognition of International Women’s Day on 8 March, Candice Stack and David Forgash discuss the internship program PIMCO hosts in partnership with Girls Who Invest.

Municipal bond investors worried by the 1st U.S. Circuit Court of Appeals’ affirmation of a lower court’s decision regarding the Puerto Rico Highway Transportation Authority should rest a bit easier: The ramifications will likely be limited.

Read our key takeaways from our 2020 Asset Allocation Outlook, including how we are positioning multi-asset portfolios in light of our outlooks for the global economy and markets.

Three key themes from our latest Cyclical Outlook will likely drive the global economy and central bank policy in the year ahead.

A review of last month’s market-moving events across countries and asset classes.

Research Affiliates examines how different asset classes perform across full market cycles, and discusses how macro forecasts inform its investment strategies.

This time, it’s the riskier segments of the corporate credit market – not housing – that could trigger the next downturn.

We think investors should not extrapolate too much from who wins the early contests, including Iowa.

How can leaders in finance embrace the Davos 2020 theme of “Stakeholders for a Cohesive and Sustainable World”? Here are our key observations.

As the Fed winds down its T-bill and repo programs, we don’t anticipate market volatility to emerge – at least not as a result of the Fed’s actions.

Questions about environmental, social, and governance (ESG) issues are becoming central to commodity markets and capital allocation discussions.

In prioritizing stability over all other objectives, China is borrowing from future growth while reducing policy ammunition to counter future shocks.

Alongside pockets of weakness in credit markets come pockets of opportunity for active managers who focus on rigorous bottom-up research and careful credit selection.

Tensions in the Middle East and North Africa have once again brought geopolitical risks to the forefront of oil markets.

A brief monthly update on what's happening in the municipal bond market.

Research Affiliates provides its outlook for 2020 and discusses where it sees attractive return opportunities across the globe.

The outlook for the global economy has improved over the past three months, but there may be less capacity to combat a recession when it comes. We discuss seven key macroeconomic themes we expect in 2020 and implications for investors.

DC plan sponsors are increasingly using TDFs that blend active and passive strategies to seek lower fees and enhanced alpha potential.

Muni issuers are increasingly refinancing tax-exempt munis in the taxable market, but both areas offer potential benefits.

The U.S.-China trade deal is one of three diminishing policy risks, but investors shouldn’t assume that all policy uncertainty has been eliminated.

While the election result reduces Brexit uncertainty significantly, it doesn’t eliminate it. Will there be an extension of the transition period? How will any deal affect the economy? In the meantime, UK banks and sterling, especially wounded since the 2016 referendum, still offer value, while low-yielding gilts look unattractive relative to other government debt, such as U.S. Treasuries.

A brief monthly update on what's happening in the municipal bond market.

In its December forecasts, the Federal Reserve estimates that the policy rate will hold steady through 2020. Will economic and trade developments change that view?

A review of last month’s market-moving events across countries and asset classes.

Research Affiliates discusses why they believe value investing is still alive and well and explains how changes to the display of expense ratios seek to enhance clarity for investors.

The recent repo squall shined a spotlight on “sponsored repo” transactions, a growing segment of the U.S. overnight funding market.

While many risk assets have rallied in 2019, the lower-rated tranches of collateralized loan obligations (CLOs) have weakened. Is this a sign that the credit cycle is turning?

We aim to support wealth management firms, advisors, and investors as they assess portfolio strategy and navigate the shifting trends we face in the new year.

Equity and credit markets have thus far taken lackluster earnings results and lower expectations in stride, but we think this could change if confidence readings drop further.

Models can help advisors streamline portfolio management while retaining the level of discretion appropriate for their practice.

Private markets remain a key source of income for institutional portfolios, but late-cycle concerns demand a thoughtful approach to opportunities and risks.

A brief monthly update on what's happening in the municipal bond market.

A review of last month’s market-moving events across countries and asset classes.

Research Affiliates discusses how its research partnerships with academic thought leaders inform its process and examines the All Asset strategies’ returns per unit of equity beta.

With global growth slowing and significant uncertainty around trade and politics, PIMCO’s Income Fund is taking the long-term view and positioning defensively.

The pitfalls and opportunities we see in high yield markets highlight the importance of active portfolio management, rigorous credit analysis, and taking a cautious and selective approach.

Rising issuance of munis available only to qualified institutional buyers (QIBs) may offer higher yields to investors who can access them.

Fed Chair Powell signaled that another “insurance” rate cut is unlikely. Instead, further rate cuts are contingent on a more material deterioration in the economic outlook.

The U.K. is set to head to the polls on December 12. Here are our key takeaways for the economy and markets.

Our Income to Outcome framework seeks to deliver a simpler, more intuitive approach to investing for retirement.

We think there are policy tools in the Fed arsenal that wouldn’t materially alter the soundness of the banking system but could allow cash to move more freely.

Trade, geopolitics, and emerging markets were top of mind at the recent annual meetings

For bond allocations, think twice before reflexively allocating to index ETFs.

Headline inflation resulting from a food price shock can never be ignored fully.

Germany’s economy is on the brink of recession. We expect a gradual recovery through the next year, but this is dependent on easing trade tensions.

The Fed has another lever to pull to ease monetary policy, one that could increase savings rates and create more disposable income.

Without pouring water on the “love fest,” we contend that the deal struck between China and the U.S. leaves much to be desired.

A brief monthly update on what's happening in the municipal bond market.

A review of last month’s market-moving events across countries and asset classes.

In this issue, Research Affiliates discusses why its contrarian philosophy may add value over the long term and how the growing likelihood of a global economic slowdown is affecting positioning.

We believe the impeachment inquiry could have an adverse impact on the ongoing U.S.–China trade conflict, but there may be a silver lining for NAFTA 2.0.

In the past few weeks, U.S. equity momentum and value factors have had their sharpest moves in more than 15 years based on our calculations.

Businesses and investors are moving ahead with progressive actions despite policy vacuums.

Short-term bonds could rise in price and potentially maintain a high degree of liquidity in response to Federal Reserve rate cuts.

In a nutshell, we concluded that the global economy is about to enter a low-growth “window of weakness,” which we expect to persist going into 2020 with heightened uncertainty about whether it is a window to recovery or recession.

We believe a disciplined approach to bond investing is critical to achieving desired return and risk objectives. Model portfolios may help.

This year, in Paris, we were excited to participate as an industry expert and to engage with attendees on ESG (environmental, social, and governance) investing in fixed income.

Weakness in the U.S. economy leaves it vulnerable to shocks. We think the Fed will respond with additional easing this year.

Markets can prove interesting when the price of liquidity abruptly increases and high yield is no longer the highest-yielding investment.

This year, in Paris, we were excited to participate as an industry expert and to engage with attendees on ESG (environmental, social, and governance) investing in fixed income.

Attacks and outages could add to the longer-term geopolitical risk premium in oil prices.

That fiscal policy is becoming the new monetary policy when it comes to fighting recession was a key conclusion of PIMCO’s Secular Forum, and this was the message ECB President Mario Draghi underlined through both actions and words.

Continued tight crude balances could be the bigger surprise to the market.

Equity-risk mitigation may be improved by combining positive expected return strategies that are negatively correlated with equities.

Two decades after inception, the eurozone countries’ arranged marriage-type of union looks shaky at best, and now it is even more challenged by ongoing, global disruptive forces.

Events of the last several weeks have not changed our long-term outlook, but we have become a bit more cautious in the short term.

While slower earnings growth is a broad headwind for both corporate debt and equities, it also tends to increase performance dispersion.

Read our key takeaways from our 2019 Asset Allocation Midyear Update, including how we are positioning multi-asset portfolios in light of our outlooks for the global economy and markets.

The institutional “golden fetters” of the interwar period have been replaced by fundamental “global fetters” that severely constrain monetary policy.

We see several areas of opportunity for muni investors in the second half of 2019.

The risk of recession has risen, but it’s not a foregone conclusion.

We think the Federal Reserve will look past stronger-than-expected consumer price increases in June and July.

Come the fall, the ECB will likely deliver yet another easing package that could effectively deplete its monetary policy toolbox.

The last few days have highlighted the inherent fragility in markets – and the growth outlook globally.

It is no longer absurd to think that the nominal yield on U.S. Treasury securities could go negative.

We think investors should take President Donald Trump at his word that he will move forward with the next round of tariffs on China come September.

We find the Fed’s statement clear, and we expect another rate cut as soon as September with possible additional cuts thereafter.

The market consequences of direct intervention by the U.S. could be substantial and thus bear consideration.

The Federal Reserve is poised to cut interest rates at its July meeting. But how much will it cut?

June inflation may have been boosted by the recent increase in import tariffs, while inflationary pressures from rising wages and tight labor markets remain notably subdued.

Major secular drivers could disrupt the global economy and financial markets over the next three to five years. We share our views on risks and opportunities ahead.

The tone of the FOMC statement and press conference was a notable shift from the May meeting, given uncertainty around the economic outlook.

Demand concerns, trade tensions, and strongly implied U.S. production are driving an oil sell-off, much like in fourth-quarter 2018, but the complicated backdrop may create investment opportunities.

We don’t expect a Fed rate cut in June, but if downside risks to the economy escalate, a 50 basis point cut in July is possible, in our view.

New U.S. tariffs on Mexico would add to the direct economic costs of the string of tariff hikes enacted during this administration.

With the U.S. and China raising tariffs on each other’s goods, we may be entering a prolonged period of trade tension.

A quiet and unsurprising FOMC statement belies the important policy discussions and decisions ongoing at the Fed.

We believe the spotlight on the burgeoning BBB credit market has diverted attention from the risks in the smaller single-A market.

We believe the spotlight on the burgeoning BBB credit market has diverted attention from the risks in the smaller single-A market.

Behavioral finance may help to overcome cognitive biases.

Even as the probability of a recession in the near-term remains low, we believe investors should look to sectors that are likely to be resilient in periods of higher volatility.

Following the Federal Reserve’s pivot to patience, we believe U.S. short-term interest rates are now anchored in The New Neutral. Global growth keeps synching lower, but may experience a soft landing later this year if China’s economy stabilizes and trade tensions ease.

While we are constructive on the prospects for emerging markets in the year ahead, we think the real potential lies in individual country and thematic opportunities.

Investors in UK inflation-linked bonds are facing two critical sources of structural uncertainty: Brexit-induced volatility and questions about the deeply entrenched (yet problematic) Retail Price Index (RPI

We believe short-term interest rates in the U.S. are now anchored in The New Neutral, as global growth keeps synching lower.

A brief monthly update on what's happening in the municipal bond market.

With a patchwork of lenders now willing to provide financing on noncommercial terms to countries in distress, “moral hazard plays” have proliferated in emerging markets.

Investors in UK inflation-linked bonds are facing two critical sources of structural uncertainty: volatility arising from the Brexit process, and questions about the deeply entrenched (yet problematic) Retail Price Index (RPI), to which UK “linkers” are tied.

The divergence between recent bullish factor performance and weaker economic fundamenta...

Investors globally are walking a tightrope today, balancing risk-taking and risk management. As growth appears poised to slow, the outlook for financial markets remains uncertain − a situation compounded by increased cost of capital, tighter financial conditions and heightened market volatility.

We favor Asian high yield over investment grade credits in spite of historical higher volatility since we view valuations as more attractive, particularly compared with U.S. high yield and emerging market peers.

We believe an active, flexible, multi-sector approach may offer investors better long-term results by focusing on structural opportunities to generate alpha.

In this issue, Research Affiliates assesses risks facing the All Asset strategies and shares insights from its CEO on fostering a winning corporate culture.

Over the past year, emerging market (EM) equities have been one of the most volatile segments of the global market. With news headlines dominated by the International Monetary Fund’s bailout of Argentina and Turkey’s sudden interest rate increase and currency depreciation, EM equities dramatically sold off in 2018 – down 14.6% for the year.

In recognition of International Women’s Day on 8 March, PIMCO leaders in three regions discuss their career experiences and the progress they see for women in finance and their own career experiences.

The landscape for women in finance has changed notably over the past two decades. Today, women represent 46% of financial services employees, according to a study by Mercer. This growth, however, has been predominantly at the junior level; women represent only 15% of the top ranks in finance, and the number falls even further at the CEO level...

Chinese stimulus could be instrumental in deciding which investors are proved right.

Bond investors will need to be very selective due to recent changes in sector credit quality.

Chinese stimulus could be instrumental in deciding which investors are proved right....

Impact investing is anchored in a fundamental belief that over the long term, healthy societies and healthy markets go hand-in-hand.

A brief monthly update on what's happening in the municipal bond market.

The decline in oil prices continues to weigh on headline Consumer Price Index (CPI) inflation, which fell 0.3 percentage point to 1.6% year-over-year in January. However, core CPI (which excludes energy and food prices) held steady at 2.2% year-over-year, with support from normalization in retail prices after holiday discounting late last year.

The European parliamentary elections may cause near-term market jitters, but we do not think the outcome will be a game-changer.

A review of last month’s market-moving events across countries and asset classes.

In this issue, Research Affiliates assesses the potential impact of a bear market in U.S. stocks on emerging markets and discusses regulatory reporting requirements.

The Federal Reserve’s recently communicated change in its outlook for monetary policy has led to concerns that the Fed is overreacting to market volatility, or worse, succumbing to political pressures. However, we believe there is a more compelling reason for the dovish shift.

Here are key takeaways from our 2019 Asset Allocation Outlook on how we are positioning asset allocation portfolios in light of our outlook for the global economy and markets.

Today’s late-cycle environment gives investors an opportunity to re-evaluate the risk and return potential of their portfolios. Since the depth of the financial crisis, core stock and bond allocations have delivered exceptional returns with modest volatility. But future returns will likely be muted even as risk increases.

Discussions and debates at this year’s World Economic Forum took a soul-searching turn with Davos organizers and delegates agonizing over the future of globalization in a world marked by nationalism, protectionism and social tensions based on economic imbalances.

Akin to the famed Stanford Marshmallow study on delayed gratification, deferral of Social Security income often maximizes lifetime benefits, particularly for those with above-average life expectancy.

We are skeptical Canada can shift its growth model, and our investment outlook for Canada is cautious as a result.

Following this week’s meeting of the Federal Open Market Committee (FOMC), the Fed issued a statement that more forcefully signaled its intention to be cautious in the face of a more uncertain outlook. Policymakers also signaled that they view the current stance of monetary policy as more or less neutral. Therefore, investors should expect the Fed to keep rates steady, for now.

In recent months China has rolled out tax cuts and incentives to boost consumption over investment while taking steps to further open its capital markets – a shift in approach that seems to accept a natural slowing in growth over time and to acknowledge the costs of an overreliance on credit growth.

We expect market volatility to continue in 2019, creating opportunities for the Income Fund.

In his first press conference of 2019, European Central Bank (ECB) President Mario Draghi said risks surrounding the eurozone growth outlook have shifted to the “downside,” versus the “broadly balanced” risks he discussed just one month ago when the bank ended net asset purchases.

While we believe the shutdown on its own would have only a modest impact on growth, the...

We are focused on identifying country-specific opportunities and carefully selecting credit positions where we see value and very low default risk.

In our view, a combination of positive macroeconomic factors is likely to keep prepayment speeds higher than the market projects.

In our outlook for 2019, we believe politics and policy out of Washington will continue to drive – and in some cases, weigh on – markets, much like they did in 2018. Investigations and manufactured crisis are likely to contribute to uncertainty. Trade tensions persist, though on a more positive note, relations between the U.S. and China seem to be improving.

With the effective fed funds rate now only slightly below the range of estimates for neutral monetary policy and few signs of economic or financial market overheating, we believe that the Federal Reserve is likely to hold rates steady in March, interrupting its pattern of quarterly interest rate hikes.

Richard Thaler and Emmanuel Roman discuss behavioral science and investing.

Tighter financial conditions and slower global growth have weakened arguments that U.S. monetary policy will be restrictive in the coming years to alleviate the risk of economic overheating or growing financial imbalances.

Five key macro debates are likely to shape the economic and market outlook for 2019.

-Global market performance remained challenged amid lingering volatility. -Concerns about softer growth, coupled with comments from the Fed, tempered market expectations for the path of future rate hikes. -An assortment of geopolitical developments continued to capture attention in November.

A brief monthly update on what's happening in the municipal bond market.

We believe markets are now broadly priced for an extended period of the status quo – where the current impasse remains, but the UK remains in the EU.

Recent fundamental changes in the leveraged finance markets mean that actively managing credit exposure is more important than ever.

Will the ECB have sufficient firepower – and support from the population – to spur the economy when the next recession arrives?

We see a synchronized global slowdown in 2019. We position cautiously but anticipate opportunities ahead.

PIMCO has mapped the SDG sustainability reporting of 246 companies globally with the goal of encouraging enhanced disclosure.

OPEC and key partners opted for a middle path coming out of the 175th meeting of the OPEC Conference, agreeing to cut oil production by 1.2 million barrels per day (bbl/d) from October levels (an even steeper cut than versus November levels). We expect the move to support prices in the low $60s/bbl for Brent crude and in the mid-$50s for WTI.

In this issue, Research Affiliates discusses the market impact of the U.S. midterm elections and its view of what differentiates All Asset’s positioning from its peers.

The combination of trade tensions, U.S. rate hikes and weaker global trade growth has weighed on emerging markets (EM) this year.

As the Federal Reserve embarks on a review of its long-run monetary framework, questions about its inflation target are resurfacing. We believe now is the time for change.

Federal Reserve Chairman Jerome Powell’s speech on 28 November helped stir a market rally as investors interpreted his comments as more dovish and favorable to risk assets. 

Many investment portfolios that rely heavily on stock-bond diversification to manage risks may not be protected against inflation surprises. Real assets offer a solution.

A brief monthly update on what's happening in the municipal bond market.

The incoming Mexican government’s costly plan to cancel the new Mexico City airport has fueled concerns that President-elect Andrés Manuel López Obrador will enact a populist agenda and squander the country’s sound financial position.

Asset allocation decisions can be challenging for investors during the later stage of the business cycle. Focusing on quality is likely the best way to manage the transition from late expansion to a potential recession.

As we approach the holiday season, most investors are beginning to think about escaping to somewhere far and exotic or spending time with family and friends. Unfortunately, while our social calendars are working overtime, markets don’t always take a break during the festive season.

Core U.S. Consumer Price Index (CPI) inflation rebounded in October, though not as much as expected, driven largely by a bounce in used car prices. The year-over-year rate ticked down to 2.1%, and evidence of tariff-related price increases was mixed.

Volatility returned and pulled markets across the globe into the red. Slowing growth momentum outside the U.S. further weighed on sentiment. Political developments from Latin America to Europe were a source of both uncertainty and assurance for markets.

Financial media and investors have been focusing on the BBB segment of the U.S. investment grade (IG) corporate bond market this year.

We expect volatility as the process moves forward, along with a potential rise in UK sovereign yields and strengthening of the pound, though some Brexit-related risk premium is likely to remain.

Index returns and traditional active management may fall short, so PIMCO StocksPLUS Small takes a different path to seek small cap alpha.

For investors focused on Sino-U.S. trade tensions, it may come as a surprise that China ran a current account deficit in the nine months of 2018, its first since 1993. The $12.8 billion deficit is only about 0.1% of GDP on an annualized basis.

The U.S. midterm elections played out much as expected, with Democrats picking up the 23 seats (and more) needed to retake the majority in the House of Representatives and Republicans easily defending their majority in the Senate.

This may be an opportune time for insurance companies to consider high-grade emerging markets.

Eurozone GDP growth was very soft in the third quarter, coming in at 0.6% for the three months to September on a seasonally adjusted annualized basis, against consensus expectations of around 1.5%. While the release is disappointing, we caution against extrapolating this weakness in quarters ahead.

European bank capital securities, the term used to refer to subordinated debt instruments issued by financial institutions, have had a challenging 2018. Spreads on Additional Tier 1 (AT1) bonds are over 150 bps wider than in January, driven by uncertainty over Italy and Brexit negotiations, combined with heavy issuance, particularly in the U.S.-dollar-denominated market.

If you live in the United States, it is hard to escape news of the upcoming midterm elections on 6 November. But for investors, are these midterms really significant?

Anti-establishment candidate Jair Bolsonaro prevailed as expected in Brazil’s presidential election on 28 October, having run on a socially conservative “more Brazil, less Brasilia” platform. This included promises to reduce corruption, increase security, allow gun ownership and oppose the legalization of abortion. It was the first time since 2002 that Brazil’s Workers’ Party (PT) did not win the presidency.

The current U.S. economic expansion is now the second-longest in the postwar era, and while it may have more room to run, we believe a recession is likely over the three- to five-year horizon. As U.S. taxpayers think about positioning their portfolios, we see three key reasons why the tax-exempt municipal market may be attractive late in the cycle.

Equity index futures are among the most liquid and cost-effective ways for investment managers to capture the returns of major stock market indexes such as the S&P 500 and Russell 2000 – especially now that financing costs have cheapened.

Global growth has not only plateaued in 2018, it has also become more uneven across regions this year. We’re seeing increasing economic divergence and differentiation between and within asset classes, both of which are typical of an aging expansion.

Alternatives allocations are becoming more mainstream in wealth management portfolios, though implementation varies greatly among financial advisors.

While trade policy has dominated headlines, we believe investors should focus on the collapse of Western Canadian Select (WCS) oil prices relative to global benchmarks, which represents the biggest exogenous risk to the Canadian economy.

By managing liquidity risk, we help ensure that portfolios are well-positioned both to withstand stress scenarios and to potentially take advantage of market dislocations.

In PIMCO’s recent Cyclical Outlook, our colleagues Joachim Fels and Andrew Balls outlined a “growing but slowing” backdrop, with the global economy in the final stages of an economic cycle. This late-cycle phase poses significant challenges to asset allocators.

Global central bankers, finance ministers and representatives from the private sector and civic groups gathered in Bali recently for the annual meetings of the IMF (International Monetary Fund)/World Bank Group. Below are 10 key takeaways from the discussions.

Worries about rising U.S. interest rates have gripped global financial markets in recent weeks, with investors questioning whether the era of historically low global interest rates will persist.

Like shock therapy, Argentina’s new lending agreement with the IMF delivers immediate benefits: increased funding and front-loaded disbursements to meet the country’s budget through next year. It also comes with serious side effects, including a likely deep recession in Argentina and the risk of political resistance leading up to the country’s elections in 2019.

While we believe investors can expect a hawkish policy stance to keep supporting prices...

As we enter another period of accelerated Brexit negotiations, how can investors best navigate the next few weeks and months? Our assessment is that a number of U.K. assets have already priced in a significant chance of a disruptive Brexit, but there is scope for further moves in either direction, depending on the path the negotiations take.

Now in its 10th year, the U.S. economic expansion could become the longest on record: Our forecast calls for the current “late-cycle” phase of the expansion to last at least another year, barring any policy mistakes.

Investors expecting that trade tensions with Washington will soon prompt additional stimulus by Beijing may be disappointed. Concerns over government debt, we believe, will limit additional stimulus – unless trade tensions weaken growth dramatically.

The Federal Reserve’s September statement, projections and press conference were in line with our expectations and support our view that the Fed will continue on a gradual trajectory of interest rate hikes.

We see growth slowing, but not an imminent recession. We invest accordingly.

Will the Federal Reserve take a hawkish turn at its next meeting ending on 26 September? There are signs it may. Although we expect the Fed to hike rates by 25 basis points, to 2.0% to 2.25%, that’s not our concern.

In this issue, Research Affiliates discusses the funds’ long-term outcomes relative to peers, views on emerging market currencies and recent research centered on momentum.

A review of last month’s market-moving events across countries and asset classes.

We look at ways to de-risk, diversify and differentiate ahead of a turn in the economic cycle.

U.S. core Consumer Price Index (CPI) inflation lagged expectations in August, breaking from the recent trend of generally upward surprises from various wage and price reports.

The UN Sustainable Development Goals provide the investment community, including bond issuers, with a framework for tackling long-term global challenges.

Risk is rising late in the cycle. How should investors respond?

One truism spanning the last three decades has been that emerging markets are a leveraged play on global growth – often outperforming when developed markets (DM) are growing but susceptible to sharp downturns when DM conditions are less favorable.

Art may now be making a comeback in monetary policy, and partly at the expense of science.

Women are transforming the global economy. The financial services industry must evolve both to better serve women investors, and to assess the impact that women’s decisions have on markets worldwide – now and in the decades to come.

It won’t be easy and key risks remain, but we believe the players and strategies are now in place to transition markets beyond Libor.

The U.S. central bank is damned either way as it faces a choice on a September rate rise.

We expect an acceleration of strategic investments into onshore China bonds as these securities join emerging market and global bond indexes.

Federal Reserve Chairman Jerome Powell’s remarks at the annual Jackson Hole Symposium emphasized several important uncertainties about the structural aspects in the U.S. economy that greatly complicate the central bankers’ medium-term job of setting monetary policy.

In commodity investing, roll yield and carry are not the same thing.

Looking through your old compact disc collection can be nostalgic. The cover photo on your favorite CD or a few bars of a summer song can transport you back in time to what seems like a better, simpler place.

We believe the Income Fund has the tools to be resilient in the face of rising interest rates.

A fresh look at after-tax returns and valuations may cast REITs in a new light.

For microeconomic advances to unleash a productivity rebound economywide, the macroeconomics must cooperate.

The UN recently wrapped up its annual High-Level Political Forum on Sustainable Development, which brings together the 193 Member States to explore how they plan to reach the UN’s Sustainable Development Goals (SDGs).

Munis may offer U.S. taxpayers key benefits as they contemplate the end of the economic expansion.

A review of last month’s market-moving events across countries and asset classes.

Japanese government bonds yield virtually zero. Yields on German bunds remain stuck below 50 basis points (bps). U.K. gilts yield only about 125 bps. Do non-U.S. bonds such as these hold any value to dollar-based investors?

U.S. consumer prices rose more than expected in July, reinforcing our view that the Fed will continue its gradual pace of interest rate hikes, at least for now.

Environmental, social and governance (ESG) indicators are integral to PIMCO’s sovereign credit assessments, which inform our investment decisions. But how exactly do we incorporate ESG considerations into our decisions?

Portfolio managers Dan Ivascyn and Alfred Murata discuss the impact of higher market volatility and how they are positioning the Income Strategy for change ahead.

In this issue, Research Affiliates discusses positioning in emerging markets and why investors should care about the distinction between real and nominal returns.

Even before President Trump’s inauguration, we at PIMCO had identified trade policy as a potential spoiler to the otherwise pro-growth nature of the president’s economic agenda. And the unfolding of this “summer of discontent” has only affirmed our view heading into 2018 that trade policy remains one of the biggest policy risks for markets and the economy this year.

Amid overall caution on credit, we believe short-dated investment grade corporate bonds offer a compelling risk/reward profile today.

The Federal Reserve held interest rates steady and released a statement on 1 August that made only minor changes to reflect the more upbeat U.S. economy since the Fed’s June meeting. Despite the lack of surprises, however, we don’t think investors should write off the meeting just yet: The more interesting aspect may well come later ‒ when the meeting minutes are revealed in a few weeks.

Ultimately, we think the sell-off will prove transient and that the relationship of real yields to gold observed over the past decade will prevail.

President Donald Trump has opened a new front in the cold currency war: He recently complained in an interview and on Twitter that the strong U.S. dollar puts the U.S. at a disadvantage and that China and the European Union have been manipulating their currencies and interest rates lower.

We see key factors beyond Brexit affecting the medium-term economic outlook for the U.K.

Master limited partnership (MLP) investors received some good news last week. The Federal Energy Regulatory Commission (FERC) issued a final ruling that clarifies and softens a previous order issued in March, which would have disallowed a long-standing policy enabling MLPs to earn an income tax allowance in their pipeline rates. 

Will they or won’t they? With the U.S. yield curve flattening to new cycle lows, whether or not the Federal Reserve will stick to its planned rate-hike path is a key question – and could soon become the key question – for financial markets.

Amid fears of escalating trade tensions, the yuan’s sharp depreciation against the dollar last month has spooked some investors who see similarities with China’s currency devaluation in 2015, an episode that prompted capital outflows and roiled markets worldwide. 

A review of last month’s market-moving events across countries and asset classes.

A brief monthly update on what's happening in the municipal bond market.

Over the next few years, financial markets could be set for a series of “Rude Awakenings,” as we forecasted in our latest Secular Outlook. The global economy is transitioning out of a post-crisis period characterized by remarkable stability, and the changes ahead could be jarring for investors.

U.S. tariffs and trade tensions have dominated headlines over the past few months. With certain tariffs aimed squarely at China, Beijing quickly responded with tariffs of its own on U.S. goods in early July. What do the tariffs mean for investors in Chinese and other Asian technology and consumer credits?

In this issue, Research Affiliates discusses positioning for a potential inflation shock and offers insight into its collaboration with PIMCO to bring forth innovative solutions for investors.

Investors may be concerned that Fed rate hikes may be bad for bondholders but it’s important to remember the fundamental benefits that bonds may bring to a portfolio no matter which way rates move – capital preservation and appreciation, income, and diversification.

We believe the bond market is uniquely suited to both benefit from and provide finance for ESG-related (environmental, social and governance) efforts.

The recent OPEC meetings and press conference have given oil investors greater clarity about the cartel’s intentions and reaction function: OPEC, along with Russia and other partners, agreed to boost aggregate output by 700,000–1 million barrels per day.

External pressures are mounting, but Canada’s biggest wake-up call may come from within.

With the economy in the later stages of its post-crisis recovery, we believe investors should be cautious and selective on corporate credit. Within the high yield sector, this caution may warrant a move up in quality toward the higher end of the spectrum: BB rated bonds.

Forecasting currency performance is like predicting the outcome of a horse race. Currencies move up the field and then fall back depending on their respective country conditions. And once in a great while, a very strong contender dominates the field – much like the winner of the Triple Crown.

How can investors navigate volatility arising from late-cycle fiscal stimulus?

PIMCO’s Global Advisory Board discusses the outlook for major economies and geopolitical developments.

The Federal Reserve’s decision today to hike its policy rate by 25 basis points (bps) to a range of 1.75% to 2.0% was widely expected. The Federal Open Market Committee (FOMC) also signaled growing consensus that the robust pace of economic activity warrants two more rate hikes this year, for a total of four in 2018.

One of the potential rude awakenings that we advised investors to prepare for in our recent Secular Outlook is a surprising surge of productivity growth over the next several years.

Despite long-running international concerns about China’s property “bubble,” the market has proven quite resilient. The Chinese government has instituted various austerity measures to cool the market, but buoyant demand for property has helped avoid any serious downturn.

Consistent with our thinking back in January 2018, trade has dominated the policy agenda in Washington and cast a pall over certain segments of the market. We continue to maintain that President Trump should be taken at his word regarding trade policy...

In a reversal from last year, the U.S. dollar has strengthened against other major currencies in 2018, reflecting rising U.S. rates, expectations of more Federal Reserve rate hikes and recent sluggish economic data outside the U.S.

A segment of the credit market many investors may overlook, preferred securities are one of PIMCO’s highest-conviction credit views today.

We expect a more difficult market environment will surprise many investors as the post-crisis era ends. It’s time to position for the opportunities ahead.

For income investors, rising interest rates have created both a challenging market environment and a better outlook for yield.

We believe the news is evidence of a broader shift toward simpler corporate structures in the midstream energy sector – a trend that supports our investment approach and our constructive view of the sector.

It may be time for U.S. investors to challenge their home-country equity biases.

For years after the financial crisis, many investors were resigned to earning next to nothing on their cash and short duration investments. Rising interest rates, however, have brought a new reality: The front end of the fixed income market looks attractive for the first time in almost a decade.

We are positioning our ultra-short and short-term bond portfolios with the goal of not only navigating rising rates but also ultimately benefiting from them.

We believe that active engagement with issuers can help reduce credit risk, unlock value for investors, and influence positive impact on economies, societies and the environment.

U.S. core Consumer Price Index (CPI) inflation was softer than consensus expectations in April, and the year-over-year rate remained stable at 2.1%. We see a couple of reasons for that, and continue to expect core CPI inflation to accelerate further (to 2.3%–2.4%) before settling back to 2.2% by year-end.

The U.S. decision to pull out of the Iran nuclear deal has potentially profound implications for the oil market. While withdrawal from the Joint Comprehensive Plan of Action (JCPOA) creates many known unknowns, any reduction in Iranian supply will likely exacerbate market deficits, suggesting upward pressure on pricing.

A review of last month’s market-moving events across countries and asset classes.

We believe the myriad inefficiencies in emerging market fixed income play to the strengths of active management.

How sensitive is the U.S. economy to rising oil prices? A popular view is that growing U.S. energy output has largely immunized the economy against the adverse effects of pricier oil.

With little in the recent economic data to warrant a change in the U.S. outlook and bond markets that were largely aligned with the Federal Reserve’s 2018 rate hike projections, today’s statement from the FOMC (Federal Open Market Committee) needed only to reaffirm the messages conveyed at the March meeting.

The 10-year U.S. Treasury yield broke 3% on 24 April to much fanfare. Stock markets tumbled, and with the media blitz that followed, many investors may have started to see “3%” in their dreams.

Global central bankers, finance ministers and representatives from the private sector and civic groups gathered in Washington recently for the spring meetings of the IMF (International Monetary Fund)/World Bank Group. With trade policy, geopolitics and emerging markets currently top-of-mind for many investors, the meetings were especially relevant this year.

We believe The New Neutral of lower-for-longer equilibrium policy rates remains a valid anchor over the medium term. The key drivers of low equilibrium rates – including demographic trends and the high level of leverage in the global economy – have not substantially changed since the financial crisis.

When the People’s Bank of China (PBOC) cut its reserve requirement rate (RRR) by 1% for China’s banks recently, the central bank said its “prudent and neutral policy stance” remained in place, since the overall quantity of excess reserves would not change much. Indeed, the PBOC will maintain a relatively high reserve requirement for China’s banks.

The Bank of England has had to navigate a difficult set of circumstances in its attempts to raise interest rates. As far back as 2014, Governor Mark Carney suggested that rate rises could come “sooner than markets currently expect,” only for those aspirations to be dashed. Indeed, the next move in interest rates turned out to be a rate cut, in the aftermath of the June 2016 Brexit vote.

After a decade of relying on investment and exports for growth, China’s effort to rebalance its economy toward consumer-led growth is well underway and should continue to build steam in 2018.

In a storm, you want to be able to reach higher ground. Recent market volatility – sparked by concerns over interest rates, inflation, global trade, the tech sector and more – has many investors shifting toward more defensive portfolio positions.

The global economic expansion has already entered its 10th year. With bumpy and brittle growth having given way to a robust and globally synchronized conjuncture, an aging cycle has suddenly become much more cyclical.

Many investors who thought worrying about inflation was “so 20th century” may now be seeing reasons to reconsider: The business cycle in the U.S. is mature, output gaps have closed, trade frictions are mounting and populism is on the rise.

The acceleration in U.S. core Consumer Price Index (CPI) inflation in March was in line with expectations, and likely a welcome development for Federal Reserve officials after a surprising string of soft inflation prints last year.

The minutes of the March 2018 Federal Open Market Committee (FOMC) meeting affirmed our outlook that the Fed will likely continue to gradually and methodically increase interest rates and that the bar is relatively high for policymakers to change the current plan for two or three more hikes in 2018.

A review of last month’s market-moving events across countries and asset classes.

Consistent with our view last month that the Trump administration’s more significant (and market-moving) trade actions had yet to come, the recent announcement of tariffs on Chinese products related to the Section 301 intellectual property investigation has roiled markets and increased uncertainty over the possibility of a trade war.

Recent tax reform has increased the dialogue around state preference municipal portfolios, and some municipal investors are inquiring whether state-specific or state preference portfolios are a good fit in the current environment.

Many of us who grew up as children of children of the Great Depression may recall our parents imploring us to “Stop throwing good money after bad!” in any number of situations, even if we didn’t always heed their wisdom.

We believe that ESG investing is not only about partnering with issuers who already demonstrate a deeply integrated approach to ESG, but also about engaging with those who wish to move forward with their ESG initiatives. We believe that successful engagement can reduce credit risk, unlock value and influence positive impact.

We maintain a neutral outlook for U.S. commercial real estate prices overall this year, following a 3% to 5% decline from their 2015 peak.

We believe that ESG investing is not only about partnering with issuers who already demonstrate a deeply integrated approach to ESG, but also about engaging with those who wish to move forward with their ESG initiatives.

Stormy weather was abundant in March: spring snowstorms in the Northeast of the U.S., a trade tussle with China that could escalate into a trade war, hawkish personnel changes in the White House, a Powell-led Federal Reserve that expects to overshoot the neutral policy rate, and the worst week for U.S. equities since January 2016.

The global expansion is either nearing its demand-driven peak or in the early stages of a supply-driven renaissance. We share our assessment and portfolio positioning.

The U.S. Federal Reserve’s announcement of another 25 basis point hike in the fed funds rate range to 1.5% to 1.75% was widely expected by us and by markets. The more interesting aspect of the March FOMC (Federal Open Market Committee) meeting is the change to central bank officials’ forecasts.

Strong Chinese Consumer Price Index (CPI) data for February suggest the world’s second-biggest economy will no longer be a source of global disinflation.

The Municipal Securities Rulemaking Board (MSRB)’s new “markup disclosure rule” is on track to go into effect in the U.S. in May 2018, as part of a broader move toward greater transparency in the municipal bond market.

We believe that balancing higher-yielding assets with higher-quality assets is the best way to achieve the strategy’s objectives across different market environments.

We believe the trade actions with the most significant potential economic and market impact have yet to unfold.

We saw little to surprise in February’s U.S. Consumer Price Index (CPI) inflation print: Core CPI (excluding food and energy prices) gained 0.18% month-over-month, a moderation from January’s 0.34% gain, and held steady at 1.8% year-over-year.

In this issue, Research Affiliates discusses positioning for potentially volatile markets and the link between equity valuations and macroeconomic conditions.

PIMCO’s new partnership with the organization Girls Who Invest is one more step toward a more inclusive financial services industry. It is also an act of conviction.

Market participants have been puzzled by the decline in the U.S. dollar since the November 2016 election. Expectations over future central bank moves and short-term interest rates offer one explanation – and potentially a signal about the dollar’s future.

Everyone seems to be a commodities bull lately. PIMCO is no exception: Our latest Asset Allocation Outlook suggests an overweight to real assets, including commodities.

With market volatility on the rise, consider a broad set of relative value opportunities across global markets.

A recent visit to the United Arab Emirates (UAE), Oman and Bahrain showed just how much the region’s fortunes are still levered to oil prices, despite the efforts of several countries to diversify.

Last March, we wrote a piece entitled “Equity Repricing Under a New Administration: A Tail Risk Scenario.” We posited that the proposed pro-growth tax and spending policies of the Trump administration, thrust onto an economy nearing full capacity, could lead to a general rise in the inflation rate and ultimately the real rate of interest.

Many investors are now willing to sacrifice liquidity in the search for higher yields, more attractive risk-adjusted returns and the flexibility to hedge against downside risk.

In our view, the prospective low-return environment calls for a capital-efficient approach that pairs actively managed bonds with passive or enhanced equities in target-date, core and retirement-income allocations.

During the second most significant repricing in U.S. Treasury bond yields since 2013, emerging market debt has so far significantly outperformed equity, oil and U.S. Treasury beta.

Recent market volatility suggests that investors are questioning whether the post-crisis subpar pace of economic growth, which we dubbed The New Normal, is subsiding, to be replaced by more traditional late-cycle outcomes – in particular faster inflation and tighter monetary policy.

U.S. inflation continued to accelerate in January, with a 0.349% month-over-month advance in core Consumer Price Index (CPI) inflation (which excludes food and energy prices) – the strongest gain since 2001.

Untethered to traditional bond benchmarks, unconstrained bond strategies can respond to current changing market conditions in various ways.

With a steady repricing of global bond markets having contributed to a sharp plunge in global stock markets, there could be a whiff of a new era in the air.

The topic of housing finance reform has come in and out of focus on Capitol Hill since Fannie Mae and Freddie Mac (the government-sponsored enterprises, or GSEs) were taken into conservatorship back in 2008.

PIMCO takes a long-term view of markets and economies, one that anchors investment decisions during shorter-term periods of market volatility. Nonetheless, the dramatic return of market volatility has understandably unnerved many investors.

A monthly review of market-moving events across countries and asset classes, and what investors can expect going forward.

The U.S. economic numbers released last week preceded a slide in equities, prompting keen interest in what the data may have been signaling to markets.

With the dramatic spike in market volatility over the past week, many investors are asking what comes next.

We expect policy will continue to drive municipal bond markets in 2018, if more constructively than in 2017. Municipal investors may remember 2017 as the year of unrealized policy fear. While the threat of tax reform and its potential to reduce the value of the muni exemption for retail investors ­loomed large, ultimately it had little impact on individual municipal bonds.

Going into Federal Reserve Chair Janet Yellen’s 32nd and final meeting, neither we nor the markets expected the Fed to make much news. Of note, however, in its statement after the meeting on 31 January, the Fed acknowledged recent firmer economic data and expressed confidence in inflation moving toward the 2% target later this year.

Investors in Europe are more optimistic than they have been in years, but there is growing concern that U.S. dollar weakness could make the euro too strong.

Economic recovery is in full swing but investors should remain vigilant of the long-term risks.

Nominal growth is likely to pick up, reflecting some recovery in real GDP and a gradual rise in inflation.

Integrating ESG into sovereign risk analysis adds a holistic and long-term perspective that is aligned with investing in sovereign fixed income.

Fixed income exchange-traded funds (ETFs) saw a record $126 billion of inflows in 2017, bringing the overall market to nearly $600 billion. The majority of these flows, as well as existing assets under management, are in passive bond ETFs. But are passive, index-tracking approaches the best way to harness the fixed income opportunity set?

After a four-year downturn in the oil and gas master limited partnership (MLP) sector, marked by a roughly 47% decline in market value, we believe sentiment toward the sector may be turning. With dividend yields approaching 8% – along with increasing free cash flow and a robust U.S. production outlook...

Although much of 2017 represented a series of fits and starts in Washington, the Trump administration and the Republican-led Congress ultimately – and against long odds – delivered on one of their biggest campaign promises: a relatively sweeping rewrite of the tax code, representing a likely boost to 2018 U.S. real GDP of 0.2%–0.3%.

Like much of 2017, politics remained keenly in focus at the end of the year. Tax reform took center stage in the U.S., and President Trump wrapped up this major legislative victory just in time for the holidays. The sweeping tax overhaul moved quickly through both chambers of Congress after the House and Senate drafted amended versions from the separate ones each had previously passed.

Years of significant growth in the U.S. corporate bond market have been accompanied by a steady decrease in overall credit quality and a trend toward higher leverage. Close to $80 billion in U.S. corporate bonds currently rated BBB potentially could be downgraded below investment grade in 2018, according to our estimates.

Investors may want to consider taking a more cautious and selective approach to BBB nonfinancial corporate bonds, particularly those in the low BBB rated segment, where the risk of downgrades is higher and the room for error is lower.

That said, we find many compelling BBB bonds in the U.S. marketplace today. As a large active fixed income manager, PIMCO is in our view ideally positioned to manage the risks in the complicated universe of BBB bonds.

In this issue, Research Affiliates provides its outlook for 2018 and discusses where it sees attractive return opportunities across the globe.

Equity investors in search of higher returns are increasingly turning to factor investing. Driving this trend is frustration with the underperformance and higher fees of traditional active equity approaches, along with a growing realization that many stock-picking strategies owe their results largely to the manager’s factor tilts rather than stock-specific risk. 

The conclusion from PIMCO’s latest Cyclical Forum is that 2017–2018 could well mark the peak for economic growth in this cycle and that investors should start preparing for several key risks that lie ahead in 2018 and beyond.

After a strong run in emerging markets through the first nine months of 2017, a recent performance setback in local bond markets has led some investors to fear that the recovery cycle may be short-circuiting. Is the two-month run of underperformance in EM local markets an opportunity or a canary in a coal mine?

We expect the global expansion to continue in 2018. Yet investors should prepare for both the consequences of policy shifts and the opportunities presented in more difficult market conditions.

Despite a rate hike, monetary policy remains accommodative.

A review of last month’s market-moving events across countries and asset classes.

Congressional Republicans’ efforts to reduce taxes and reform certain elements of the U.S. tax code have been impressive thus far. In a matter of weeks, the House has passed its version of a bill, and the Senate is hoping to take up its own bill later this week.

Ben Bernanke and our panel of world-renowned advisors examine the outlook for global economic growth amid geopolitical shifts.

Growth in China’s offshore corporate bond market seems likely to continue in 2018, driven by the financing needs of investment grade state-owned enterprises (SOEs) and private sector...

Core U.S. Consumer Price Index (CPI) inflation rose 0.22% month-over-month in October, broadly in line with expectations for firming price trends but notably stronger than the 0.14% average monthly pace this year.

As many traditional credit sectors begin to approach full valuations, credit investors may want to look in new directions for attractive returns with manageable downside risk. In diversified credit portfolios today, de-risking and building liquidity are important, but we also see attractive relative value opportunities in a couple of (sometimes overlooked) sectors.

A review of last month’s market-moving events across countries and asset classes

The transition from Libor to SOFR as a benchmark short-term rate needs to be undertaken with tremendous care, and PIMCO would like to help by outlining clear steps for stakeholders...

How we’re positioning muni portfolios for turbulence – and the opportunities it may create.

Creative solutions may be needed to address remaining asset quality issues in Europe’s banks.

With stocks hitting record highs, many investors want to mitigate the largest source of risk in their portfolios – equities. In recent decades, fixed income has served this purpose well. The asset class has generally delivered both positive returns and negative correlations with equities.

President Trump has announced Fed Governor Jerome Powell as his nominee for Chair of the Federal Reserve Board. A Fed governor since 2012, Powell has been confirmed twice by the U.S. Senate and likely will be confirmed as chair without controversy in time to take over when current Chair Janet Yellen’s term expires in February 2018.

For the first time in over 10 years the Bank of England raised its official policy rate, a hike of 0.25% to 0.5%. The rationale is a combination of growth continuing at or slightly above trend, unemployment falling further from its current 42-year low...

One could argue that this latest statement came in on the dovish side. But a broader read rapidly dispels that notion.

Our central expectation for the European Central Bank (ECB) meeting on 26 October is for the Governing Council to extend asset purchases by nine months at €30 billion per month to September 2018, without yet committing to a specific end date, while strengthening its commitment to keep policy rates and the balance sheet unchanged when asset purchases end next year.

Actively managed front-end strategies may be able to mitigate the erosion of real capital experienced in passive benchmarks as rates rise.

A global factor helps explain why central bank policies often tend to be correlated across countries.

Unprecedented changes are reshaping the financial advice industry and affecting portfolio construction for individual investors. New regulation, technological innovation, capital market trends and the prospect of lower future returns are all exerting profound effects.

The governing coalition of Abe’s Liberal Democratic Party (LDP) and the smaller Komeito Party staged a big win in the snap election. Although recent public polls indicated a victory, the final tally was on the higher side of consensus expectations, including ours.