A historic sell-off enhances value, with high yields, strong fundamentals, and ample reserves mitigating policy risks.
U.S. trade policy has evolved significantly in a matter of weeks.
Rapid U.S. policy changes pose challenges for investors accustomed to a global financial system anchored in U.S. markets and assets.
With Congress out for the next two weeks for Easter recess and a short trading week in New York, it should be a quieter week – though tariff-related news continues to capture headlines.
On 9 April, President Donald Trump announced a 90-day pause on the higher “add-on” reciprocal tariffs on 50-plus countries that had been announced the previous week, precipitating a historic equity market rally and showing that there was seemingly a limit to how far he would go to move forward with his trade agenda.
On 2 April, the Trump administration announced sweeping tariffs that were more aggressive than many had expected. Then on 9 April, the administration announced a 90-day pause on most of the new country-specific “reciprocal tariffs.”
While the path may have twists and turns, the destination seems clear; higher U.S. tariffs.
The world has entered a period of geopolitical uncertainty, with the U.S. now at the center of the storm.
At their March meeting, Federal Reserve officials left the policy rate unchanged at 4.25%–4.5% and signaled further patience on rate cuts as they navigate greater uncertainty about the economic outlook.
The European Central Bank will likely continue to cut interest rates, but future decisions could be more contentious.
Attractive yields and a broad opportunity set bolster active bond investments amid today’s uncertain macroeconomic and market outlook.
Lofty U.S. stock valuations call for a renewed focus on risk assessment and portfolio diversification.
It is not just tariffs that might affect inflation and growth but also trade uncertainty and the effects of the ambitious Trump policy agenda.
Exploring the delicate balance between protectionism and global cooperation
Despite still elevated domestic inflation, weak growth and inflation projected at target this year strengthen the case for further rate cuts.
Facing an uncertain outlook, the Federal Reserve holds rates steady and signals a watch-and-wait approach.
Amid an unsettled global economic outlook and elevated equity valuations, bond markets present attractive yields and important diversification benefits.
Macroeconomic uncertainties prompted the Federal Reserve to signal a slower pace of policy rate cuts in 2025 and beyond.
As cash yields dwindle, the case for fixed income becomes increasingly compelling.
We continue to agree with market pricing following the ECB’s latest rate cut, but see additional downside risks to growth post-U.S. election.
The transition from bank-dominated lending to a diversified financing ecosystem offers unprecedented opportunities for private credit investors.
Amid concerns about the impact of rising deficits on U.S. Treasuries, it helps to differentiate bond investments by maturity, credit rating, and global relative value.
How to unlock value in a complex market landscape.
The inverse correlation between bonds and stocks has returned, broadening potential for risk-adjusted returns in multi-asset portfolios.
We seek to capitalize on today’s attractive yields while staying mindful of economic and market uncertainties.
Even with Republicans poised to control the White House, the Senate, and the House of Representatives, slim congressional majorities could hinder the president’s efforts to enact his agenda.
In a week with a U.S. presidential election and market volatility, the Federal Reserve cut its policy rate 25 basis points (bps) as expected. Amid this noise and the generally positive messages from recent macro data, Fed Chair Jerome Powell emphasized that downside economic risks had decreased, but the policy rate remains above neutral, suggesting that gradual cuts are still likely to come over time.
Many investors today use EM debt for the wrong reasons, manage it imprudently, or overlook the best parts.
Even without new staff projections, the European Central Bank makes policy less restrictive and lowers its relevant rate to 3.25%.
In the wake of pandemic shocks, economies appear more “normal” than at any time since 2019. Yet policy rates remain elevated.
Alpha (α) is a fundamental yet poorly understood concept in finance. Simply put, it is the difference between the return of an investment and that of a risk-adjusted benchmark. In a more advanced definition, alpha is the residual in an asset pricing equation (see Appendix A). Alpha is what active managers strive to achieve and passive managers do not pursue.
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.
