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Idiosyncratic Risk in China Real Estate: What Does it Mean for the Property Market and Banks?
Given recent developments, Pimco has updated their outlook for China real estate and its potential impact on the banking sector.
Fed Policy Amid Elevated Inflation Concerns
FOMC members signaled at September’s meeting their intent to announce the first reduction in the monthly pace of bond purchases as soon as the November FOMC meeting.
A Dizzying Summer in D.C. as U.S. Debt Ceiling Looms Again
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.
Commercial Real Estate: The Office Market in a Post‑COVID World
The pandemic accelerated the secular work-from-home trend, creating winners and losers in office real estate assets. This post discusses PIMCO team members market views, particularly within the office sector.
Fed’s New Repo Facility Should Ease Future Stress, With Caveats
The Federal Reserve continues to prepare for the next liquidity disruption. PIMCO thinks their latest facility would likely help, both psychologically and practically.
Substantial Further Progress? Not Yet, Says the Fed
The statement and press conference following the July FOMC meeting reinforced PIMCO’s outlook that in the second half of this year the FOMC will announce its plans to begin to wind down its large-scale asset purchases.
ECB: New Inflation Target, Old Tools
The Race to Net Zero: Challenges and Opportunities
More and more investment is being channelled toward achieving net zero carbon emissions. To understand the scale of the task, consider what net zero means.
Leveraged Loan Issuers: Just Do It (Transition to SOFR)
Despite prompts from regulators and market participants, the U.S. leveraged loan market has been slow to embrace SOFR, even while other fixed income sectors issue new SOFR-referencing contracts.
Repressed Repo Rates: Sifting Through the Noise
The most recent hike in the RRP rate was likely to prevent the possibility of any “soft” closes at money-market funds, since investing at 0 bps would likely become uneconomical in the long run.
Top Five Insights from PIMCO’s 2021 ESG Investment Summit: Financing a More Sustainable Future
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.
Short‑Term Reference Rates at a Crossroads
As U.S. financial markets prepare to abandon the London interbank offered rate (Libor) and move toward a new short-term benchmark, there has been renewed discussion – and recently signs of division – about the next appropriate reference rate.
China Property Sector Remains Robust Despite Policy Headwind
Momentum in China’s property market remains strong so far in 2021, driven by healthy demand for housing. Although we expect this demand strength to be partially offset by the government’s recent credit tightening, the property market should remain relatively stable this year.
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.