Andrew Balls, Global Fixed Income Chief Investment Officer at Pimco, said one to two further interest-rate increases from the Federal Reserve "seems reasonable" to reach the central bank's 2 percent inflation target.
Balls also identified "good value" in the long end of the Treasury yield curve, suggesting the market may be overpricing inflation or growth risks at longer duration. That assessment implies an attractive entry point for investors with longer time horizons seeking yield.
The call for additional hikes underscores continued duration risk in shorter-dated maturities. A higher terminal rate would compress prices in shorter-term bonds further. Conversely, strength in long-end valuations could reflect expectations that longer-duration bonds now offer compensation for the risks ahead.
