Fixed Income News: PIMCO’s Ivascyn Has a Fed Warning, Nuveen Expects Yields to Fall, Vanguard Favors High Quality

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  • 01 mins 20 secs
PIMCO’s Dan Ivascyn tells Bloomberg TV that even if the Fed does pause hiking, it’s “dangerous to think they are done.” Nuveen expects “higher for longer” rates, but thinks yields will come down slightly. Finally, Vanguard writes that the global bond market is approaching cruising altitude.
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PIMCO’s Dan Ivascyn sees about 50/50 odds of another hike in Sept. and warns investors against assuming the Fed is finally done raising rates. He told Bloomberg TV “There is definitely a chance that this cycle is stretched a lot longer due to the exceptional period of low rates after Covid.”

And while Nuveen sees “higher for longer” rates remaining as a key theme, the asset manager favors selectively taking on risk and expects Treasury yields to fall slightly this year, with the 10-year ending 2023 around 3.35%. Nuveen adds in its Aug 7 commentary that senior loans enjoyed their 10th consecutive weekly gain.

Finally, Vanguard thinks we’ll see a shallow recession and favors higher-quality securities that are less economically sensitive. In its Q3 report, Vanguard writes that even though there could be more turbulence ahead, the global bond market is near cruising altitude and higher yields mean investors are getting paid to wait.

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