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Pimco Says Bond Market Isn’t Ready for September Rate Increase

The Federal Reserve will probably raise interest rates in September, though fixed-income prices show traders aren’t fully prepared, according to Pacific Investment Management Co.

Pimco, which runs the world’s biggest bond fund, is capitalizing on the discrepancy by cutting its positions in short-term Treasuries, said portfolio manager Mihir Worah. Short-term yields are among those most influenced by what the Fed does with its benchmark rate and stand to rise most when policy makers increase borrowing costs.