Outlooks

As expectations have shifted toward slower growth, higher inflation, and higher rates, investors have rotated back to sectors like large-cap technology and semiconductors, capable of delivering durable earnings in a tougher macro environment.

Circumstances since 2020 have repeatedly demonstrated how adaptable the economy is in the face of new challenges. We see no reason for that resilience to fade in the balance of the year.

Last week’s data reaffirmed that inflation pressures remain the defining narrative across the economic landscape.

I’m hopeful new chair Kevin Warsh will help change the Fed’s inflation-tolerating institutional culture. Early signs look positive. Today we’ll talk about how insidious inflation is and why those who think a little inflation is fine should have their heads examined. It is not fine… for anyone.

The AI boom goes from strength to strength. Big technology companies are pouring hundreds of billions of dollars into chips, data centers and power-hungry infrastructure. One estimate puts annual AI infrastructure investment above $650 billion in 2025 and potentially over $800 billion in 2026..

In a world of high starting yields and rupturing economic alliances, investors who actively diversify across regions, sectors, and currencies can be better positioned to pursue durable returns.

As the market continues to broaden in 2026, a balanced approach matters more than ever.

New Fed Chair Kevin Warsh is already reshaping policy communication by reducing forward guidance, questioning the dot plot’s future and emphasizing real-time data, potentially increasing Treasury market volatility.

Kevin Warsh, the newly appointed Federal Reserve chair, led his first committee meeting in June. The decision to leave short-term interest rates unchanged didn’t surprise anybody, but there was plenty for markets to chew on. Warsh seems likely to make structural changes that may not impact near-term monetary policy but could matter much more to the US economy over the long run.

Halfway through 2026, this market perspective is harder to write with confidence than most. That’s not a phrase I use lightly. Over four decades of markets, there have been plenty of uncertain moments, but the number of significant, unresolved issues I’m watching right now is unusually high.

Kevin Warsh’s first Federal Reserve meeting as chair mattered less for the rate decision than for what he revealed about how the Fed intends to operate. Warsh signaled a shift toward less guidance and more flexibility.

The international ETF landscape has become quite popular with investors over the last year. Investors flocked to ex-U.S. equity opportunities over the last 12 months, driven by high domestic valuations and persistent concentration risk. By contrast, emerging and international markets have both offered lower costs and healthy diversification.

The most important development this week was not the Federal Reserve meeting itself, but the sharp and unexpected decline in oil prices. Just days ago, many market participants expected crude to remain elevated amid ongoing tensions in the Middle East. Instead, WTI crude briefly traded with a 73 handle, only modestly above its pre-conflict levels and far below the $90-$100 range that many feared.

Kevin Warsh, the newly appointed Federal Reserve chair, led his first committee meeting in June. The decision to leave short-term interest rates unchanged didn’t surprise anybody, but there was plenty for markets to chew on.

U.S. equities posted a modest advance during the holiday-shortened trading week despite a Wednesday sell-off following a more hawkish than expected Federal Reserve meeting under its new chair, Kevin Warsh.

The fixed income environment continues to project uncertainty, as higher-for-longer interest rates persist amid sticky inflation. Investors may want to lean on the expertise of active managers when deciding between an active and indexed fund.

Kevin Warsh, the new chairman of the FOMC, has long been critical of forward guidance, which is the Fed’s practice of explicitly signaling the future path of interest rates (e.g., “rates will stay low for an extended period” or publishing a projected path for policy rates). His concern is that the guidance could give the impression that policymakers might have a high degree of confidence about the future path of the economy and rates.

The US-Iran conflict – and its impact on oil prices – has dominated headlines over the past three months. Higher oil prices have pushed inflation to a three‑year high, reshaping the Federal Reserve’s rate outlook.

On Monday, President Donald Trump announced that the U.S. and Iran have reached a peace deal to reopen the Strait of Hormuz, the 21-mile chokepoint through which roughly 20% of the world’s oil supply normally flows.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

The announcement of an extended ceasefire in the Middle East is welcome news. The accord, which is scheduled to be signed late this week, reduces a source of geopolitical uncertainty that has hovered over the global economy. But significant risks remain.

The convergence of long-term structural drivers and emerging cyclical tailwinds suggests the industrial sector may be approaching an inflection point, with conditions increasingly supportive of new development.

Emerging market (EM) fixed income's risk-adjusted profile has meaningfully improved. Sharpe ratios across EM credit and local rates have rebounded, with EM credit delivering one of the strongest risk-adjusted performances in fixed income over the past two years.

As the summer economic landscape takes shape, investors are navigating shifting monetary policy, stubborn inflation pressures, and unexpected market momentum. This week’s snapshot breaks down the most critical updates and data releases from the past week to give you a clear view of where the economy is heading.

Kevin Warsh came out as a hawk during his first press conference as Federal Reserve (Fed) chair. Franklin Templeton Fixed Income CIO Sonal Desai believes that he may be the most hawkish chair since Paul Volcker. Warsh stressed that the Fed can and will bring inflation back to 2%, and signaled his preference for a smaller balance sheet and no forward guidance—a welcome return to more orthodox monetary policy.

Co-packaged optics, the technology of integrating lasers and optical components directly into network switches rather than using pluggable modules, is becoming the standard architecture for large-scale GPU clusters, and Nvidia needed to lock in supply for the buildout it is planning.

In Kevin Warsh’s first meeting as Fed Chair, the FOMC held on rates but made significant changes to both their economic projections and the nature of today’s Fed statement. And today’s press conference shows there is a lot more change to come.

The Federal Reserve held the policy rate steady at 3.50%–3.75% at its June meeting – an outcome that was never really in doubt. The more interesting signals came from the Summary of Economic Projections (SEP), the policy statement, and Chair Kevin Warsh’s first press conference, which may prove to be his most substantial.

It’s a busy finish to the first half on the corporate event calendar. The bulls have the lead, but the bears have had their moments of glory so far this year. A handful of key AGMs, conferences, and earnings events will keep investors on their toes amid a colorful macro backdrop.

The questions in our inbox have gotten louder lately. Are we reliving 1999? Has the tech rally reached the dangerous ‘Euphoria’ bubble stage we first discussed in our 2026 Outlook? And is the recent surge in initial public offerings (IPOs)— led by SpaceX on Friday— diluting existing holders just as valuations were already drawing scrutiny?

One of the most debated topics in private credit is the size of the investment opportunity – or, in industry parlance, the total addressable market (TAM). But the way TAM is typically framed can be misleading.

Markets returned to positive territory for the week, with the turning point occurring Thursday after the announcement of a potential deal with Iran that would extend the ceasefire while reopening the Strait of Hormuz for the first time since February 27.

New Federal Reserve Chairman Kevin Warsh will preside over his first Federal Open Market Committee (FOMC) meeting on June 16-17, stepping in at a complex moment with inflation at a three-year high as oil prices remain elevated, labor market risks easing with job growth averaging ~140,000 year to date versus only 10,000 last year, and hawkish voices on the Fed gaining traction.

As we go to press, fighting in the Mideast has escalated, sending crude higher, but stocks, in early Monday trade, have shown remarkable stability following Friday’s deep selloff.

Gold has always had a way of testing investors’ expectations. Just when the headlines appear most supportive—inflation is rising, geopolitical risk is escalating and confidence in fiat currency is being questioned—gold can suddenly move in the opposite direction.

Chris Galipeau discusses high-conviction insights that go beyond media headlines.

This week’s inflation data highlights a growing disconnect between how markets interpret inflation and how consumers experience it. The May Consumer Price Index (CPI) report delivered a nuanced message: While headline inflation accelerated, core inflation remained relatively contained, an outcome that provides some comfort to policymakers.

Recent economic data continues to point to a resilient U.S. economy. The unemployment rate held steady at 4.3% in May, while payrolls increased by 172,000 jobs. Hiring remained strongest in leisure and hospitality, though there were also encouraging signs from more cyclical areas of the economy.

During this time of year, we like to take stock of what happened in the first half of the year and compare it with the expectations we had at the beginning of the year when we published our full-year outlooks.

The U.S. economy faced intensifying headwinds in May as both consumer and wholesale inflation metrics surged to multi-year highs.

The current economic downturn is best described as hybrid and structurally driven. It leans heavily on demand constraints, though it is triggered and complicated by ongoing supply shocks.

In this month’s Allocation Views, strong corporate fundamentals and resilient growth fuel our continued optimism toward equities into June, despite persistent inflation and more restrictive monetary policy.

For more than four decades, PIMCO’s Secular Forum has provided a disciplined framework for stepping back from short-term market noise to assess the structural forces that will shape the global economy and markets over the next five years. Yet rarely has this exercise been more consequential than it has recently.

After more than three years of underperformance, our prognosis for global health care stocks remains positive. The sector now offers a broader set of high-quality companies at valuations that appear increasingly disconnected from fair value.

Many advisors deliver capital markets commentary as if the goal were simply to explain what’s happening. They assemble charts, cite data, summarize headlines and hope the client will draw the “right” conclusion.

The Senate passed $70 billion immigration enforcement funding bill, Capitol Hill struggles to find consensus on how to regulate AI, and the Trump Accounts app is live.

LPL Research analyzes bond markets as yields rise, exploring Fed policy expectations, inflation trends, and whether bad news is already priced into Treasuries.

Equity markets should remain supported by strong earnings and capital investment trends through 2026, but market concentration and macro risks leave less room for error.

The takeaway for both HY and EM corporates is straightforward. Once oil prices are above breakeven, further moves in oil tend to matter less for credit performance.

While job growth has reaccelerated, supporting consumption, the underlying income picture is less encouraging.

Building resilient portfolios in markets delivering mixed messages can be a challenging affair. In our ongoing engagement with the retail and advisor community at VettaFi, we hear first-hand just how investors are tackling that challenge this year.

Interest rates remain one of the primary concerns for investors as Kevin Warsh has officially assumed leadership at the U.S. Federal Reserve (Fed). While we believe the possibility of a rate cut has diminished considerably, we are not yet expecting additional rate hikes.

It’s no secret that investors are on the lookout for opportunities in their fixed income portfolios. This is especially true in today’s shifting landscape. Equities are hot, perhaps too hot, and many investors want strong performances out of their bonds in order to keep up.