Viewpoints

Reassessing Short‑Term Strategies Amid Market Recalibration: Liquidity, Libor, and the Fed

After the sharp sell-off in March, we see emerging opportunities for savers and short-term investors.

Short-term fixed income assets sold off in March as investors sought to de-risk and indiscriminately raise liquidity in response to fallout from the global health crisis. Jerome Schneider, PIMCO’s head of short-term portfolio management, discusses the outlook for short-term assets given recent Fed announcements of support, how a possible resurgence of COVID-19 could affect liquidity markets, and the future of Libor (the London Interbank Offered Rate) as a benchmark for trillions of dollars of financial instruments.

Q: Short-term markets got hit hard in the first quarter, along with other market segments. Could we see that again, such as if we see a resurgence of Covid-19, or have the Federal Reserve’s actions bolstered liquidity enough?

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Jerome M. Schneider

Head of Short-Term Portfolio Management

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CMR2020-0511-1182937

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