Key Takeaways From PIMCO’s Cyclical Outlook: From Hurting to Healing

davfor

This blog post discusses what Pimco observed when they gazed into their crystal ball:

We are seeing the first-ever recession by government decree – a necessary, temporary, partial shutdown of the economy aimed at preventing an even larger humanitarian crisis. What is also different this time is the unprecedented speed and size of the monetary and fiscal response, as policymakers and monetary authorities try to prevent a recession turning into a lasting depression.

We believe this crisis is likely to leave three long-term scars:

Globalization may be dialed back
More private and public debt
Shift in household saving behavior

We believe a caution-first approach is warranted in an effort to protect against permanent capital impairment.

https://blog.pimco.com/en/2020/04/key-takeaways-from-pimcos-cyclical-outlook-from-hurting-to-healing?mod=article_inline

rmt

Good one!

bee

...we still see room for U.S. rates to drop further if stabilization takes longer than our baseline outlook. We see U.S. agency mortgage-backed securities (MBS) and U.S. Treasury Inflation-Protected Securities (TIPS) as attractive high quality assets despite recent volatility.

MikeM

Thanks @davfor. Good read. I guess it all hinges on this statement with the word "try" being very important here,

...as policymakers and monetary authorities try to prevent a recession turning into a lasting depression.

Mark

I can't argue with a thing he said.