Asks why PIMCO stood firm on US assets when others were bailing in April/March and reaped benefits.
Host
Mohit Mittal
Context was tariff uncertainty adding to challenges for consumers and businesses. Higher costs lead to lower consumer spending. Business uncertainty around tariffs would slow hiring plans as they cut costs.
Asks about internal colleague discussions vs. client behavior and whether they conflicted.
Host
Mohit Mittal
Internal discussions centered on trade-off between inflation impact and growth slowdown from tariffs. Clients expressed concerns about US policy but data showed no meaningful near-term shifts in foreign participation.
Asks about uniqueness of the moment and whether there was historical precedent or new ground.
Host
Mohit Mittal
Expected tariffs to increase from 2% to 10%, but announcement was closer to 20% weighted average. Different aspect was potential change in foreign investor participation view.
Mohit Mittal
Have reduced duration exposures in US because US Treasury market has been biggest outperformer relative to other developed markets like Australia, UK, Japan where rates have gone the other way.
Asks about general outlook for volatility moving into 2026.
Host
Mohit Mittal
Volatility is here to stay due to competing forces: positive growth effect from upcoming fiscal bill vs. tariff uncertainty and AI capex that may not materialize as expected.
Mohit Mittal
Can construct well-diversified global portfolios with yield of 6-7% which looks very attractive relative to cash, equities and other opportunities.