Pacific Investment Management Co. finds current U.S. bond yields attractive and sees a wide range of opportunities in the fixed-income market, according to Marc Seidner, PIMCO's chief investment officer of non-traditional strategies.
Seidner laid out the firm's positioning in a recent podcast, drawing on themes from his publication "Charting the Year Ahead," which covers key market dynamics for 2026. He is a generalist portfolio manager and a member of PIMCO's Investment Committee.
The views emerged from PIMCO's cyclical forum, an internal meeting that assesses market conditions over a six-month horizon.
Seidner's flexible portfolio currently holds a short position on the long end of the yield curve—a trade designed to benefit from curve steepening dynamics he expects to reassert in 2026.
Steepening was a dominant force after Liberation Day in 2025 and has shown renewed signs of strength in the U.S. market. The Federal Reserve has cut short-term rates by 50 basis points, yet two-year, three-year and four-year maturities have remained anchored while 10-year yields sit higher than they did in September when the easing cycle began. That divergence is driving the steepening.
The breadth of available opportunities allows PIMCO to position for various market outcomes without depending heavily on specific Fed actions, Seidner said.
For holders of long-duration assets, a steepening curve amplifies duration risk. Seidner's short position on the long end serves as a hedge against rising long-term rates, generating gains if that move accelerates.
