Pimco believes that the Fed's credibility is at stake and that current rates of return on United States debt are attractive

Pimco (Penho) indicated that the market was overstretched about the Fed’s credibility against inflation and that the current level of US debt return seemed attractive. Marc Seidner, the company’s non-traditional strategy chief investment officer, expects the Fed to maintain interest rates this year, although the market expects the bank to raise interest rates by 50 per cent of the 25 basis points at its next meeting. He noted that inflation and economic growth were slowing down and basic data were weak. However, as fiscal pressures put pressure on long-term United States debt, the yield curve on United States debt could be steeper. (Pembo)