While Pimco announced that they are preparing for a “harder” descent in the global economy, Daniel Ivascyn, Pimco’s CIO, said that the markets’ central banks were overly optimistic during the fight against inflation.
Pimco, which manages the world’s largest active bond fund, announced that it is preparing for a “harder” descent in the global economy.
Daniel Ivascyn, CIO of Pimco, which manages about $1.8 trillion, said markets are overly optimistic about the ability of central banks to avoid a recession while fighting inflation.
Speaking to the Financial Times, Ivascyn stated that it may be five or six months late for the effect of interest rate hikes to be felt.
Stating that the inflation problem is very serious, Ivascyn said that it will be more difficult for central banks to cut interest rates. Although Pimco expects a “soft landing” scenario as an institution, it recommends low-risk, high-rated government and corporate bonds for bond investment.