Following strong 2025 returns, high quality fixed income continues to offer attractive yields and global diversification at a time of stretched equity valuations and tight credit spreads.
Macro Signposts highlights takeaways from the data analysis conducted by our team of economists and other experts.
Elevated yields, steeper yield curves, and ongoing volatility make core bonds a compelling choice for total return, income, diversification, and downside risk mitigation in today’s markets. Active management is key: Historically, it has helped core bond portfolios outperform passive strategies through a rigorous, diversified approach.
The Federal Reserve delivered a widely expected 25-basis-point (bp) rate cut in December, then signaled a more data-dependent path ahead. Barring an economic shock, we probably won’t see another rate cut until the second half of next year.
Marc Seidner, CIO of Non-traditional Strategies, explores opportunities across equities, bonds, credit, and commodities that have the potential to offer investors resilience and diversification.
This technology is moving quickly, with most businesses only in the early stages of understanding its capabilities. Whether and how fast AI can unlock new, transformative, lucrative idea generation or unleash a force in the U.S. economy similar to the “China shock” – the period in the early 2000s when outsourcing shrunk the U.S. manufacturing base and structurally changed the U.S. labor market – is yet to be seen.
Investors have poured into gold – but they may also see compelling benefits from a broad-based commodity allocation.
The ongoing U.S. government shutdown has policymakers – and investors – operating without much of the timely official data that usually inform their decisions. This could have a tangible impact on Federal Reserve policy in particular.
China’s ability to sustain fairly robust economic growth despite a massive property sector downturn is now facing new tests as global trade barriers rise, and domestic demand shows fresh signs of weakness.
The Federal Reserve on Wednesday announced a widely anticipated 25-basis-point (bp) rate cut, bringing the federal funds target range to 3.75%–4.00%. With markets priced for this move and the Fed operating in a data vacuum due to the U.S. government shutdown, the rate cut and modest statement changes were largely uneventful.
The recent high-profile bankruptcies and the timing of their collapse are consistent with this changing macro backdrop, although these cases were also allegedly exacerbated by inconsistencies in collateral accounting and pledges.
The balance of risks to the Federal Reserve’s dual mandate (price stability and maximum employment) prompted the central bank to lower its policy rate in September in an effort to bolster the economy and employment.
Locking in attractive bond yields can support long-term returns, especially as central banks cut interest rates and tariff effects pose risk to global economic growth and inflation.
The Federal Reserve resumed its rate-cutting cycle at the September meeting, lowering its policy rate by 25 basis points (bps) to a range of 4%–4.25%, after being on hold since its previous cut in December. The Fed also signaled a less restrictive stance to come amid mounting labor m
Mortgage bond reinvestment could be the Federal Reserve’s most effective and immediate tool to unlock the housing market – without even touching interest rates.
The rise of private markets has brought new attention to private investment grade (IG) credit, which can offer investors a premium over public IG for giving borrowers customized terms – though that premium comes with certain risks.
The Federal Reserve notes the balance of risks to the U.S. economy may warrant a shift in policy stance – in other words, a rate cut.
Uncertainty remains high, but so are bond yields, leading to attractive opportunities for active investors, in our view.
The degree to which growth in Europe slows, along with inflation developments, will be key in determining the path ahead for the European Central Bank.
Investors enjoyed broad gains across major asset classes in the first half of this year, but they endured considerable market swings to earn those returns.
In the weeks leading up to last month’s Israeli and U.S. strikes on Iran, oil prices climbed – not due to actual supply disruptions, but in response to a geopolitical risk premium.
In recent months, markets have whipsawed amid changes in trade policy, geopolitical shocks, concerns about fiscal sustainability, challenges to central bank independence, technological advancements, and earnings surprises in both directions. Despite this, stocks and bonds in much of the world are close to where they began the year.
As direct lending matures and other private credit areas expand, active investors can apply relative value strategies across sectors – and even entire markets – to pursue enhanced outcomes.
Until recently, commercial real estate appeared poised for a long-awaited rebound. However, 2025 has revealed a new reality: Uncertainty has become structural.
Former Federal Reserve Vice Chair Richard Clarida explains where yields may be headed, as well as positioning considerations for the long-run by charting the relationship between r* and term premium.
The U.S. Federal Reserve left interest rates unchanged in June, as widely expected, but revisions to its economic projections indicate a more uncertain outlook.
New strategies, shifting flows, and innovative technologies are driving a more dynamic and diversified marketplace in fixed income ETFs.
With the world order in flux, investors can look to fortify portfolios by diversifying across global markets and capitalizing on attractive, high quality yields.
Kristofer Kraus, portfolio manager and co-lead of PIMCO’s asset-based finance business, charts the nuances behind the overall resilience of U.S. consumers – and explains how these insights shape lending and investment strategies.
A rushed exit from conservatorship could increase mortgage rates and worsen home affordability.
We maintain a focus on resiliency as elevated yields within high quality fixed income continue to offer attractive opportunities.
Fed officials remain patient, likely awaiting hard evidence of a weaker U.S. labor market before considering rate cuts.
Sustainable adjustments to trade imbalances require supportive monetary and fiscal policies – not just currency intervention.
Although President Trump has said he has no intention of firing Fed Chair Powell, the Trump administration may be testing the laws underpinning Fed independence.
Former Federal Reserve Vice Chair Richard Clarida shares three charts highlighting possible macro inflection points in the business cycle: from growth and inflation to debt and labor.
A historic sell-off enhances value, with high yields, strong fundamentals, and ample reserves mitigating policy risks.
U.S. trade policy has evolved significantly in a matter of weeks.
Rapid U.S. policy changes pose challenges for investors accustomed to a global financial system anchored in U.S. markets and assets.
With Congress out for the next two weeks for Easter recess and a short trading week in New York, it should be a quieter week – though tariff-related news continues to capture headlines.
On 9 April, President Donald Trump announced a 90-day pause on the higher “add-on” reciprocal tariffs on 50-plus countries that had been announced the previous week, precipitating a historic equity market rally and showing that there was seemingly a limit to how far he would go to move forward with his trade agenda.
On 2 April, the Trump administration announced sweeping tariffs that were more aggressive than many had expected. Then on 9 April, the administration announced a 90-day pause on most of the new country-specific “reciprocal tariffs.”
While the path may have twists and turns, the destination seems clear; higher U.S. tariffs.
The world has entered a period of geopolitical uncertainty, with the U.S. now at the center of the storm.
At their March meeting, Federal Reserve officials left the policy rate unchanged at 4.25%–4.5% and signaled further patience on rate cuts as they navigate greater uncertainty about the economic outlook.
The European Central Bank will likely continue to cut interest rates, but future decisions could be more contentious.
Attractive yields and a broad opportunity set bolster active bond investments amid today’s uncertain macroeconomic and market outlook.
Lofty U.S. stock valuations call for a renewed focus on risk assessment and portfolio diversification.
It is not just tariffs that might affect inflation and growth but also trade uncertainty and the effects of the ambitious Trump policy agenda.
Exploring the delicate balance between protectionism and global cooperation
