Pimco Disagrees: No Rate Hike Through 2026, Treasury Yields Attractive

Pimco's Chief Investment Officer for non-traditional strategies, Marc Seidner, thinks investor anxiety over the Federal Reserve's inflation-fighting credentials has gone too far. He believes current US Treasury yields represent a genuinely attractive entry point.

The call from Pimco puts them on the opposite side of a crowded trade. Fed funds futures are pricing in roughly a 50% probability of a 25-basis-point rate hike at the next Federal Open Market Committee meeting, but Seidner expects the Fed to hold rates exactly where they are through the end of 2026.

This confidence is based on two pillars: moderating inflation data and softened growth signals. Seidner fears that an additional rate increase would risk tipping the economy into something uglier than a gentle cool-down.