PIMCO says bullish longer term bonds (12 month horizon), cites peaking inflation

<p>PIMCO said it was bullish on the performance of long-term bonds:</p><ul><li>continue to favour long-term bonds over the next year, as they provide high yields not seen for over a decade while offering a cushion against economic uncertainty</li><li> and expectations inflation has peaked</li></ul><p>More:</p><ul><li>U.S. economic growth is expected to slow the remainder of 2023 and next year, "hovering between stagnation and mild recession,"</li><li>said much of this year's resilience was due to fiscal support, with deficits widening and U.S. households still benefiting from pandemic-related stimulus measures</li><li>but it sees that support waning next year at the same time as inflation keeps eroding households' excess savings</li><li>

"As fiscal support fades, the drag from tighter monetary policy will intensify,"</li></ul><p>Adds also:</p><ul><li>Core U.S. inflation is likely to be in the 2.5%-3% area by the end of next year</li></ul><p>—</p><p>Pacific Investment Management Company (PIMCO) is an investment management firm.</p><p>US 10 year yield daily chart.</p><p>I posted this last week, since then events have conspired to title the answer tentatively to 'yes':</p><ul><li><a href="https://www.forexlive.com/centralbank/was-todays-drop-in-bond-yields-the-circuit-breaker-weve-been-waiting-for-20231004/" target="_self">Was today's drop in bond yields the circuit breaker we've been waiting for?</a></li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.