Pimco's Seidner: Anxiety Over Fed Credibility Under Warsh Is Unwarranted

Pimco's chief investment officer of non-traditional strategies, Marc Seidner, says anxiety over Federal Reserve credibility is unwarranted. He argues that under new Fed Chair Kevin Warsh, the institution's independence and credibility on inflation are no longer in doubt.

Seidner points to early signals from Warsh, including less forward guidance, lighter balance-sheet use, more open debate among officials, and a greater willingness to act aggressively. This two-way volatility is what keeps credibility doubters awake, but Seidner believes it's precisely what's needed for the Fed to effectively manage inflation.

The 10-year Treasury yield is currently around 4.55%, with Seidner suggesting that high-quality bonds have already outperformed cash across most of the curve in 2026. He argues that convexity, truncated downside, meaningful upside, is the insurance equity investors lack, even in private credit.

Seidner's calm assessment is not just about US markets; it has implications for emerging economies as well. With every shift in US yield expectations, currencies like the Kenyan shilling and Nigerian naira reprice. Seidner believes that investors need to recognize the new Fed under Warsh, rather than clinging to outdated perceptions.