Insights

Bond markets are pricing in additional Federal Reserve interest rate hikes, acknowledging the central bank’s emphatic resolve to tame inflation despite the likely trade-offs.

After withstanding a multitude of global challenges last year, emerging markets look poised for improvement as inflation recedes and the path of monetary policy comes into view.

As the COVID-19 recovery continues, we expect Asia’s growth-inflation dynamics to diverge from the rest of the world, led by China’s long-awaited economic reopening.

Despite macroeconomic headwinds, commodities markets may offer attractive return potential this year in light of ongoing supply constraints and China’s reopening.

We believe Congress will reach an agreement before the debt limit is reached, but markets could face turbulence later this year.

Resilient assets with attractive yields can help portfolios stay centered in 2023, when we expect inflation to moderate, central bank policy to steady, and a recession to take hold.

Resilient assets with attractive yields can help portfolios stay centered in 2023, when we expect inflation to moderate, central bank policy to steady, and a recession to take hold.

With interest rates higher amid a challenging macro environment, we see a compelling case for bond allocations and are cautious about higher-risk investments.

With yields now higher, we believe bonds offer compelling value in this challenging macro environment.

PIMCO’s Global Advisory Board discusses the longer-term outlook for geopolitics, inflation, and other macro themes.

Volatility, inflation, and geopolitical strain have countries and businesses focusing on defense. We argue for building resilience in portfolios in this fragmenting world, and delve into risks and opportunities we foresee over the next five years.

Active management and risk awareness may help investors navigate a global economy where inflation becomes “too hot” and growth “too cold.”

Key regions will likely travel varied, volatile, and uncertain trajectories in 2022 as the global economy progresses from mid-cycle expansion toward late-cycle dynamics.

Bond markets are pricing in additional Federal Reserve interest rate hikes, acknowledging the central bank’s emphatic resolve to tame inflation despite the likely trade-offs.

After withstanding a multitude of global challenges last year, emerging markets look poised for improvement as inflation recedes and the path of monetary policy comes into view.

As the COVID-19 recovery continues, we expect Asia’s growth-inflation dynamics to diverge from the rest of the world, led by China’s long-awaited economic reopening.

Despite macroeconomic headwinds, commodities markets may offer attractive return potential this year in light of ongoing supply constraints and China’s reopening.

We believe Congress will reach an agreement before the debt limit is reached, but markets could face turbulence later this year.

We expect further weakening in U.S. home prices, although not a sharp decline, as higher mortgage rates pressure affordability and induce many homeowners not to move.

Traditional channels of liquidity for commercial real estate have collapsed, providing attractive opportunities for distressed investors.

The U.S. Federal Reserve is likely to pause rate hikes in 2023. At least three factors will drive the decision on when and at what rate to pause.

China’s central government puts high-quality growth as top priority, along with continued support for business and opening-up.

In a dovish move, the central bank raises rates by half a point.

Shocks to the U.S. banking system underscore how even cash holdings can involve risk and also suggest that the timeline for a recession may have drawn nearer.

The failure of Silicon Valley Bank raises questions for Fed policy and economic growth.

Strength in employment and inflation has caused markets to raise the implied terminal rate while still expecting the Fed to normalize policy – which is different from easing – in 2024

Four employees reflect on their life experiences.

U.S. inflation may not be moderating as quickly as many were expecting.

The European Central Bank raised its policy rate, and more hikes are coming.

Investors face mixed signals between the Federal Reserve’s policy guidance and recent economic developments.

Even after gold ceased to be the “standard” in the global monetary system last century, it maintains its glitter as a viable investment, especially during periods of rising inflation.

Alternative investments offer opportunities to diversify portfolios in times of market uncertainty. But among a range of options, investors must first understand the risks and benefits.

A glossary of terms to help guide investors through the key terms used in the private alternatives space.

High yield bonds – defined as corporate bonds rated below BBB− or Baa3 by established credit rating agencies – can play an important role in many portfolios. They typically offer higher coupons than government bonds or high grade corporate bonds (or, corporates) and have the potential for price appreciation in the event of an improvement in the economy, or performance of the issuing company (of course, if these conditions worsen, then prices can also go down). Because the high yield sector generally has a low correlation to other sectors of the fixed income market along with less sensitivity to interest rate risk, an allocation to high yield bonds may provide portfolio diversification benefits. In addition, high yield bond investments have historically offered similar returns to equity markets, but with lower volatility.

Interest rate swaps have become an integral part of the fixed income market. These derivative contracts, which typically exchange – or swap – fixed-rate interest payments for floating-rate interest payments, are an essential tool for investors who use them in an effort to hedge, speculate, and manage risk.

Offering a wide range of potential opportunities for active investors, sustainable bonds are an increasingly important part of global fixed income markets.

Most bond investors know that interest rate changes can affect the value of their fixed income holdings. How a bond or bond portfolio’s value is likely to be impacted by rising or falling rates is best measured by duration.

The currency market is the largest and most liquid financial market in the world. Currencies like the U.S. dollar, the British pound and the euro trade in the foreign exchange (FX) market 24 hours a day, fluctuating in value relative to each other almost constantly – and there are several paths to potential profits in the FX market.

Commodities are a distinct asset class with returns that are largely independent of stock and bond returns. Therefore, adding broad commodity exposure can help diversify a portfolio of stocks and bonds, potentially lowering the risk of an overall portfolio and boosting returns. Given their impact on consumer goods prices, commodities can also offer a hedge against inflation.