PIMCO's Current Outlook for Interest Rates Interest Rates Outlook Comprehensive easing: The Federal Reserve sought to underpin markets and ultimately the economy when it announced a comprehensive easing package on 15 March, followed by the establishment of a commercial lending facility on 17 March. Policy measures included near-zero policy rates, large-scale purchases of U.S. Treasuries and mortgage-backed securities (MBS), lower rates on currency swaps, and regulatory relief for banks. It’s as close as it gets to "whatever it takes." Outlook: A global recession stemming from supply disruptions and a sudden and drastic drop in demand (mostly for services) appears to be a foregone conclusion. Ensuring the recession stays relatively short-lived and doesn’t morph into an economic depression will require a large fiscal response to support individuals and businesses. Measures may include tax relief, transfers to individuals, subsidies to firms, and government guarantees for bank loans – all of which will increase government deficits and implicit government liabilities, and may lead to higher future deficits. However, given low – and in some countries negative – interest rates, higher government debt levels should be manageable. Investor takeaway: The Fed's moves aim to help restore an orderly functioning of the very core of the U.S. financial markets: the Treasury market, the U.S. mortgage market and short-term corporate debt markets. However, more action will be needed and will likely be forthcoming over the next few weeks and months. For more on PIMCO's outlook for markets and how investors can prepare for volatility, please see our “Market Volatility” page. Filters: Filters: Reset All Filters XClose Filters Dropdown Topic/Tag Tags Reset Close Download ({{cCtrl.itemsToDownload.length}}) Empty Remove {{selOpt}} Filter () filters applied Related Thought Leadership Section : Date : Experts : Remove Filter Reset All February 2021February '21 Save Chart Download https://www.pimco.com/en-us/88gtl9tqgmsr Copy Link Share Blog Fixed Income: Low Yields Don’t Tell the Whole Story Fixed Income: Low Yields Don’t Tell the Whole Story February 2021February '21 Save Chart Download https://www.pimco.com/en-us/88gtfjffxb1t Copy Link Share Research The Discreet Charm of Fixed Income The Discreet Charm of Fixed Income February 2021February '21 Save Chart Download https://www.pimco.com/en-us/88gjwv8gw695 Copy Link Share In Depth PIMCO’s Capital Market Assumptions, February 2021 PIMCO’s Capital Market Assumptions, February 2021 February 2021February '21 Save Chart Download https://www.pimco.com/en-us/88gd4qrhgtm9 Copy Link Share View from the Investment Committee Preparing Portfolios for Recovery and Growth(video) Preparing Portfolios for Recovery and Growth Positioning Your Portfolio Positioning across interest rate environments Reduce sensitivity to rising rates With short-term strategies, you can de-risk by reducing your portfolio’s sensitivity to interest rates and overall volatility while still seeking attractive yield. Short-Term Assets Seek resiliency in an environment where rates may fall Benchmark-oriented core bond portfolios – typically offering diversification with a high-quality bias – may provide resiliency in a risk-off environment when rates typically fall. Visit Total Return Embed flexibility to navigate different environments Benchmark-agnostic strategies offer a greater ability to diversify traditional risks and tactically reposition to take advantage of market dislocations. Income Solutions Rates Education Rates 101 Get smart on all things rates, like the relationship between rates and bonds, and how to gauge rate risk within the context of your clients’ portfolio. Learn and Earn CE Credit FAQs What are advisors asking us about rates? Do negative yields mean negative returns? Is an inverted yield curve an indicator of a recession? Aren’t rising interest rates bad for bonds?
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Blog Fixed Income: Low Yields Don’t Tell the Whole Story Fixed Income: Low Yields Don’t Tell the Whole Story
In Depth PIMCO’s Capital Market Assumptions, February 2021 PIMCO’s Capital Market Assumptions, February 2021
View from the Investment Committee Preparing Portfolios for Recovery and Growth(video) Preparing Portfolios for Recovery and Growth
Rates Education Rates 101 Get smart on all things rates, like the relationship between rates and bonds, and how to gauge rate risk within the context of your clients’ portfolio. Learn and Earn CE Credit