PIMCO Chief Investment Officer: The extent of the Fed's rate cut is not the key

Odaily Odaily News Daniel Ivascyn, chief investment officer of Pacific Investment Management Company (PIMCO), which manages the world's largest actively managed fixed income fund, said that the bond market's expectations for the Federal Reserve to cut interest rates are too high. Swap rates in New York on Tuesday afternoon showed that traders expect the Federal Reserve to cut interest rates by a total of 115 basis points this year. This means that in the remaining three meetings, starting with Wednesday's decision as early as one, there will be a 50 basis point cut. In the next 12 months, the market expects a total rate cut of more than 240 basis points, a pace of rate cuts that is very rare in non-recessionary periods. Ivascyn, who manages the $163 billion Pimco Income Fund, said in an interview: "We think the market may be a little too hasty in its expectations of short-term rate cuts. In the coming months, there is a risk of re-acceleration of inflation, which may cause the Federal Reserve's actual rate cuts to be lower than the level reflected in market prices." (Jinshi)