🌍 Old-Fashioned Bond Math for a New-Fashioned Fed

🌍 Old-Fashioned Bond Math for a New-Fashioned Fed
PIMCO's Marc Seidner and Pramol Dhawan argue new Fed Chair Kevin Warsh is shifting the central bank toward less forward guidance, raising market volatility — conditions that favor active bond management. With the 10-year Treasury yielding about 4.55%, they estimate that in an adverse growth or credit-shock scenario a 10-year Treasury could return 10%+ over a year, giving bonds asymmetric upside versus concentrated equity markets, where the top 10 S&P 500 names make up about 37% of the index. Their takeaway: the case for bonds doesn't require a bearish equity view, just recognition that current yields plus policy uncertainty make high-quality fixed income attractively diversifying again.
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