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Rethinking Cash Holdings to Avoid Near‑Zero Yields
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.
Bank of Canada: Walking a Tightrope
On April 21 the Governing Council of the Bank of Canada (BoC) will meet to discuss monetary policy. Many investors believe that the BoC’s April meeting will mark the first developed market (DM) central bank to begin normalizing monetary policy.
Global Chip Shortage: The Winners and Losers
The recent shortage in chips has significant implications for consumer prices, company profits, employment, inflation, and even national security.
Cyclical Outlook Key Takeaways: Dealing With an Inflation Head Fake
In our spring 2021 Cyclical Outlook, PIMCO discusses their outlook for global growth, inflation, and central bank policy will likely mean for markets and investors over the next year.
SLR Expiration: Treasury Markets Likely to Shoulder the Costs
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.
Focusing on Inflation May Miss the Bigger Risk
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.
Fiscal Spending Could Cause a U.S. Growth Spike – Compounding Investors’ Concerns on Inflation
While a period of above-target inflation has become more likely, in our view, the likelihood of a self-reinforcing inflationary process similar to what happened in the 1970s is still relatively low.
Fixed Income: Low Yields Don’t Tell the Whole Story
Avoiding Turbulence: Fed Policy and Communication in 2021
Because of the outlook for highly expansive U.S. fiscal policy, many market participants have shifted focus to the Fed’s exit strategy.
Beyond Brexit: Outlook and Risks for the U.K. Economy
While there may be some temporary frictions at the border, they pale in comparison to the near-term uncertainty around the economic effects of COVID-19 and the speed of the vaccination distribution.
Tail Winds Provide Lift for Emerging Markets Investments
Cyclical Outlook Takeaways: Bounded Optimism on the Global Economy
In our January 2021 Cyclical Outlook we discuss the outlook for global growth, policy, and inflation in 2021, together with the implications for markets and investors. This blog post is a distillation of our views.
Asset Allocation Views: Early Cycle Investing
As our latest Asset Allocation Outlook discusses in detail, we expect profit growth will accelerate, and the improvement in fundamentals should bode well for risk markets and cyclical assets in particular.
The 60/40 Portfolio Is Alive and Well
The Fed’s Latest Balance Sheet Guidance: A Compass, Not a Map
At the December 2020 meeting of the Federal Open Market Committee (FOMC), the Fed kept the pace and composition of its asset purchases unchanged, but provided new forward guidance, in line with expectations
Green Light to a Greener Economy: Three Investment Trends
Harvesting Yield in Emerging Markets
Top 5 Insights From the European Investment Summit 2020
PIMCO’s recent annual Investment Summit aimed to help investors prepare for a world of “Escalating Disruption”. Here are five key takeaways.
Secular Outlook Takeaways: Escalating Disruption
This post discusses the importance of being prepared for a variety of disruptions and actively pursuing opportunities that arise when volatility occurs.
Assessing China’s “Structural” Monetary Policy
The overarching economic goal of China’s leadership is to transform its old growth model to a more sustainable path, addressing the long-term challenges of an aging population, declining productivity and less and less room for policy stimulus.
Emerging Market Bonds: Part of a Resilient Portfolio?
Should the Fed Buy Treasuries or Agency MBS During QE? Yes
The Role of Bonds in a New Era of Low Yields
Monetary Policy Framework: The Fed Says What, But Needs Help on How
While the Fed 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.
Gold Still Shines Bright
A Slow and Uneven Recovery Still Likely Despite July’s U.S. Price Bounce
Overall, July’s CPI rebound is encouraging, as it now appears CPI inflation could end 2020 closer to 1.5% y/y.
Fed Reinforces Commitment to Ongoing Monetary Policy Support
As expected, the Federal Open Market Committee (FOMC) did not announce a major shift in monetary policy following the July meeting.
June CPI Report Underscores Economic Fragilities
Consumer prices were firmer than widely expected in June, but underlying softness in the report was a stark reminder that the U.S. economy remains fragile and that more stimulus will likely be necessary to support the recovery.