Central Banks
Pimco’s Ivascyn Says Fed Will Take Notice, May Pause Rate Hikes
- Small bank turmoil set to reverberate for multiple months
- Tighter financial conditions spurs significant risk aversion
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Financial stress among smaller US banks could prompt the Federal Reserve to pause its hiking cycle as soon as this month, according to Daniel Ivascyn, chief investment officer at Pacific Investment Management Co.
“A lot has changed over the weekend,” said Ivascyn, the manager of the $116 billion Pimco Income Fund, the world’s largest actively managed bond fund. “There has been a meaningful tightening of financial conditions and significant risk aversion that we don’t think is over. This is likely a multi-month adjustment process” for the financial system.