Pimco's Fels Says It's Not the Time to Sell Bonds as Yields Are Headed Lower

The transcript discusses the current state of Treasurys and bonds, highlighting their reduced risk mitigating characteristics due to recent market rallies. It explores the possibility of negative yields in Europe and the U.S., noting that while the Fed is unlikely to go negative, treasury yields might. Despite reduced long-term value, bonds can still serve as diversifiers in portfolios. The speaker advises against selling bonds now, given the Fed's potential actions like going to zero interest rates or restarting asset purchases, which could lead to lower bond yields in the near term.

What is the current state of Treasurys as risk mitigators according to the transcript?

• They are highly effective.

• Their effectiveness is limited due to recent rallies.

• They are not effective at all.

• They are more effective than ever.

What is a potential future scenario for treasury yields mentioned in the transcript?

• There is a possibility they could go negative.

• They will increase significantly.

• They will remain stable.

• They will definitely go negative.

Despite reduced long-term value, what role can bonds still play in portfolios?

• They can replace stocks entirely.

• They have no role in portfolios.

• They can act as a primary investment.

• They can serve as a diversifier and risk mitigator.

What is the suggested action regarding bonds in the current market situation?

• Convert bonds to stocks.

• Sell bonds immediately.

• Hold onto bonds for now.

• Ignore bonds completely.

What potential actions by the Fed are mentioned that could impact bond yields?

• Stopping all market interventions.

• Going to zero interest rates and restarting asset purchases.

• Increasing interest rates.

• Selling off all bonds.