Pimco Isn't Predicting U.S. Recession Amid Elevated Risks, Fixed-Income CIO Balls Says

The transcript discusses the potential impact of a US recession on bond yields, noting that while a recession is not currently predicted, it could lead to a significant drop in yields. The possibility of negative interest rates in the US is considered unlikely, despite European trends. The conversation shifts to the deflation trade, contrasting it with the previous reflation trade, and examines inflation expectations in the US and Europe. The discussion concludes with an analysis of recession risks, particularly in light of US-China trade tensions and upcoming tariff increases.

What is the potential impact of a US recession on the 10-year Treasury yield?

• It will decrease significantly.

• It will become volatile.

• It will increase significantly.

• It will remain unchanged.

Why is it unlikely for the US to adopt negative interest rates?

• The US has a different monetary policy.

• Negative rates have not been successful in Europe.

• The US economy is too strong.

• The US prefers higher inflation.

What is the relationship between global yields and US yields?

• Global yields have no effect on US yields.

• Global yields push US yields higher.

• Global yields drag US yields down.

• Global yields stabilize US yields.

What is the current state of inflation expectations in Europe?

• They are decreasing.

• They are stable at about 1%.

• They are rising rapidly.

• They are highly volatile.

How might US tariffs impact economic growth?

• They will boost economic growth.

• They will have no impact.

• They will weaken economic growth.

• They will stabilize economic growth.