Bond.az reports that Pacific Investment Management Co.'s chief investment officer Daniel Ivascyn warned the Federal Reserve and other central banks may need to tighten monetary policy if inflation expectations continue rising.
'If long-dated inflation expectations become more significantly unanchored, then you are going to see a tightening of policy even in the face of some economic weakness,' Ivascyn said. Such a scenario would push rates higher and increase pressure on equities and credit markets.
PIMCO manages $2.3 trillion in assets and maintains a disciplined approach to interest rate risk. Ivascyn said over a three-year period, the firm remains comfortable with interest rate exposure, noting investors can build high-quality fixed income portfolios yielding 6% to 7%.
