Odd Lots Dan Ivascyn Is Excited About a New Era in Fixed Income
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Dec 8, 2025 
Dan Ivascyn, Chief Investment Officer at PIMCO, dives into the evolving landscape of fixed income. He highlights why bond valuations may outperform equities in the next 5-10 years despite past struggles. With Federal Reserve independence at risk, he discusses how AI-driven investments could reaccelerate growth. Dan also shares insights on private credit's evolution and warns about the pitfalls of relying solely on credit ratings. Plus, he views mortgages as attractive investments while noting ongoing housing challenges.
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Fed Cuts Depend On Confusing Data
- PIMCO expects the Fed to cut rates soon but warns data could force a pause if growth or inflation reaccelerates.
- Aggressive cuts could trigger a long-end sell-off that undermines the easing's intent.
Term Premium Is Back
- PIMCO sees an elevated term premium versus the past decade and prefers longer maturities more than before.
- Still, they keep positions concentrated in shorter maturities and expect long-end underperformance risks.
Buy Bonds For Valuations, Not Correlation
- Buy bonds now based on attractive starting valuations rather than relying solely on negative stock–bond correlations.
- Expect bonds to offer competitive risk-adjusted returns versus equities over the next 5–10 years.