Pacific Investment Management “PIMCO” expects an “even sharper decline” of the global economy, as the heads of central banks are ready to continue raising interest rates, Daniel Ivascyn, chief investment officer at the U.S. bond giant said.
“The greater the monetary tightening, the greater the uncertainty about the delay in its effects, and the greater the risk to the more extreme economic outlook,” Ivascyn told the Financial Times in an interview.
He pointed out that when interest rates rose last year, the delay in the appearance of their impact five or six quarters was the “basic rule” then.
Although Pacific Investment Management “PIMCO” believes a soft landing is the most likely outcome for the U.S. economy, Ivascyn told “Financial Times” that the world’s largest active bond fund manager is avoiding areas of the market that would be most at risk in the event of a recession.
“Pimco”, owned by the German company “Allianz”, prefers high-quality government and corporate bonds at the moment.
“Central banks are probably less willing to provide support, for fear of fueling higher prices,” Ivascyn said.
