Bond giant Pimco prepares for “harder landing”

Pimco announced that it is preparing for a “harder” landing in the global economy, while Pimco’s CIO Daniel Ivascyn said markets are overly optimistic about central banks’ ability to avoid a recession while fighting inflation. Pimco, which manages the world’s largest active bond fund, announced that it is preparing for a “harder” landing in the global economy. Pimco, which manages approximately $1.8 trillion, CIO Daniel Ivascyn said markets are overly optimistic about central banks’ ability to avoid a recession while fighting inflation. Speaking to the Financial Times, Ivascyn noted that the impact of interest rate hikes can be felt by five to six months, and said, “The more tightening we do, the greater the uncertainty around the lag effect and the greater the risks to the economic outlook.” Ivascyn said that the inflation problem is very serious and that it will be more difficult for central banks to cut interest rates. Although Pimco expects a “soft landing” scenario as an institution, it recommends low-risk, high-rated government and corporate bonds in bond investments.