Industry Voice: Surge in Rates May Be Overstating the Case for Inflation

Longer-dated Treasury yields have climbed as markets consider whether economic growth and inflation expectations might accelerate more rapidly. We believe inflation pressures will remain in check and bond yields will be range-bound.

clock • 1 min read

U.S. rates have moved substantially higher in the past few weeks, advancing a trend that's seen Treasury yields rise from historic lows amid the depths of the pandemic last year. As markets try to gauge whether economic growth and inflation could accelerate more quickly than anticipated in 2021, many investors are left wondering whether rates will climb further in the near term. We think upward pressure on inflation is likely to be relatively contained as the global economy continues to recover from the effects of COVID-19, and that yields on longer-dated bonds should stay broadly bounded within recent ranges as central banks keep short-term policy rates anchored near zero.

 

Continue Reading

 

For investment professionals only. PIMCO Europe Ltd (Company No. 2604517) Ltd (Company No. 2604517) and PIMCO Europe Ltd - Italy (Company No. 07533910969) are authorised and regulated by the Financial Conduct Authority (12 Endeavour Square, London E20 1JN) in the UK. PIMCO Europe Ltd services are available only to professional clients as defined in the Financial Conduct Authority's Handbook and are not available to individual investors, who should not rely on this communication.

More on Investment

Partner Insight: 2025 outlook: Five themes for a new economic landing

Partner Insight: 2025 outlook: Five themes for a new economic landing

Wheels down, elevation up

Saira Malik, Chief Investment Officer, Nuveen
clock 19 December 2024 • 1 min read
Partner Insight:  Q&A: Spotlight on income

Partner Insight: Q&A: Spotlight on income

Central banks embarking on interest rate cuts create an additional tailwind for fixed income investments. Yet, in some areas, like the corporate market, spreads remain tight, so diversification and flexibility remains key, says Dan Ivascyn, PIMCO's Group CIO, Managing Director.

Sarka Halas
clock 19 December 2024 • 2 min read
Partner Insight: Quality growth investing helps build resilient portfolios

Partner Insight: Quality growth investing helps build resilient portfolios

Investors seeking stocks to weather all market conditions may find solace in quality growth companies, which have historically proven their ability to deliver superior returns, says Obe Ejikeme, Fund Manager of FP Carmignac Global Equity Compounders.

Sarka Halas
clock 18 December 2024 • 7 min read
Trustpilot