Treasury Bonds: Top Asset Manager Sees Mid-Term Rebound
Pimco compared recent U.S. market behavior to that of emerging markets, noting that sudden shifts in domestic policy add uncertainty.
Quick overview
- Pimco is focusing on U.S. Treasury bonds amid market volatility and uncertainty.
- The firm believes recent selloffs have created attractive yields for medium- to long-term investors.
- CIO Mohit Mittal suggests that current market conditions may offer unique buying opportunities for Treasuries.
- Pimco notes that potential economic slowdown could further increase the appeal of safe-haven assets.
Amid rising uncertainty and market volatility, Pacific Investment Management Co. (Pimco), one of the world’s largest asset managers, is betting on the resilience of U.S. Treasury bonds.
Following weeks of political turmoil and sharp market swings, Pimco is starting to identify value in the Treasury market. According to Mohit Mittal, the firm’s CIO for core strategies, the recent selloff in U.S. assets has pushed yields to levels that may appeal to investors with a medium- to long-term horizon.
“The market is too focused on the risk of foreign capital outflows and not enough on the possibility of an economic slowdown,” Mittal said in an interview with Bloomberg TV. In that light, Pimco sees medium- and long-term Treasuries as offering a compelling entry point.
Treasury Bonds Performance
His comments come after the yield on 10-year Treasuries surged past 4.6%, climbing more than 70 basis points in a short period. The spike reflected investor anxiety around President Donald Trump’s policy decisions and broader macroeconomic stability. However, recent signs of progress in U.S.-China trade talks have helped ease some of the pressure, leading to a modest pullback in yields.
Pimco compared recent U.S. market behavior to that of emerging markets, noting that sudden shifts in domestic policy are now adding a new layer of risk for investors.
Even so, the firm believes that the current volatility has created unique buying opportunities. “For investors with patience and a six-to-twelve-month outlook, current levels could be an attractive moment to increase exposure to Treasuries,” Mittal noted. He added that a potential moderation in U.S. economic growth could further enhance the appeal of safe-haven assets like sovereign bonds.
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