This chapter explores the atmosphere of a Southern California financial conference, focusing on the impending Federal Reserve decision on interest rates. Speakers analyze the uncertainty between potential 25 or 50 basis point cuts and the implications for the economy. They also delve into the complexities of current financial conditions, highlighting both positive and negative market signals, as well as the challenges the Fed faces in managing inflation and signaling to the market.
It’s Fed Day, and while everyone expects the central bank to cut benchmark interest rates, the key question is by how much? Will it be 25 basis points or 50? Investors are evenly split between the two possibilities, setting up one of the most uncertain meetings ever. So what does a big bond manager do on a day like this? In this episode, we speak with Dan Ivascyn, Group CIO at Pimco, where he manages the $158 billion Pimco Income Fund. He tells us what he’s expecting from the FOMC, and what he’s seeing in terms of financial conditions and the real restrictiveness of the monetary environment right now. He also walks us through what Fed day is actually like at Pimco, where he thinks the economy is going, and answers the question of whether — with rates finally going down — bonds might be back in favor.
See omnystudio.com/listener for privacy information.