Pimco, a leading bond investment firm, identifies investment opportunities in U.S. Treasuries following a sell-off triggered by concerns over U.S. presidential policies. The market is currently wary of foreign investors potentially reducing their U.S. asset allocations, but it has not heavily factored in the likelihood of weak economic growth, according to Pimco's Chief Investment Officer, Mohit Mittal. He suggests that given the potential for long-term economic slowdown in the U.S., current bond levels offer investment value.
The firm's analysis indicates that some investors might believe the worst phase of the market downturn is over. Over the past month, a wave of selling U.S. assets has questioned the safe-haven status of U.S. Treasuries. However, the bond market is beginning to stabilize, with long-term yields declining recently. Mittal notes that U.S. Treasuries, particularly those with maturities of 5 to 10 years, are becoming attractive.
Earlier this month, the 10-year Treasury yield surged over 70 basis points to nearly 4.6% after briefly falling below 4%. Pimco, which manages $2 trillion in assets, previously compared U.S. market volatility to emerging market dynamics, highlighting the challenges posed by rapid policy changes. Mittal emphasizes that recent market fluctuations present opportunities for patient investors to increase their exposure.
