Daniel Ivascyn, chief investment officer of Pimco, the giant US bond manager, said the 10-year Treasury yield could rise to 6 per cent for the first time since 2000, citing inflation worries driven by high oil prices and concerns over the expansion of US public debt. The 10-year Treasury yield has risen about 120 basis points so far this year and is trading just below the 5.34 per cent level hit last week, its highest since 2002, and now stands at 5.29 per cent. In an interview with the Financial Times published on the 9th, Ivascyn pointed to factors including hedge funds unwinding loss-making bond positions, saying a sharp short-term rise from current levels is 'realistically possible' and that 'reaching it is quite possible.' He noted that further increases in Treasury yields could weigh on risk assets such as equities and corporate bonds, and that a rise above 5.5 per cent would likely trigger 'a significant decline in both the credit and equity markets.' Global bond markets have come under strong selling pressure this year as soaring energy prices stoke inflation and the artificial intelligence boom boosts economic growth, with the 10-year Treasury yield recording its biggest quarterly rise of the century in the third quarter.
Pimco CIO says 10-year Treasury yield could rise to 6% on inflation worries from high oil prices and US debt expansion, implying higher yields.
Pimco's CIO is quoted making the yield forecast, but the article gives no company-specific financial impact on Pimco itself.
