The Federal Reserve will probably raise interest rates in September, though fixed-income prices show traders aren’t fully prepared, according to Pacific Investment Management Co.

Pimco, which runs the world’s biggest bond fund, is capitalizing on the discrepancy by cutting its positions in short-term Treasuries, said Portfolio Manager Mihir Worah. Short-term yields are among those most influenced by what the Fed does with its benchmark rate and stand to rise most when policy makers increase borrowing costs.

“One of our most dominant interest-rate positions is an underweight to the front end,” said Worah, who is one of three managers for the $117 billion Pimco Total Return Fund, the record holder for asset size. “We’re a little more hawkish on what the Fed will do than the rest of the market,” he told reporters in Sydney on Thursday.

Traders have pushed back forecasts for when the Fed will boost borrowing costs amid uneven growth in the U.S. economy. Policy makers will increase borrowing costs at their December meeting, based on a Morgan Stanley index. About a month ago, the outlook was for September.

U.S. employers added more than 200,000 jobs in both January and February, before hiring slowed to 126,000 in March. Retail sales and inflation have lagged behind economist forecasts, and gross domestic product growth slowed.

Fed officials have held their benchmark, the target for overnight lending between banks, close to zero since 2008 to support the economy.

“We think the U.S. Fed goes in September,” Worah said. “The market is pricing about a 30 or 35 percent probability. We think it’s closer to 70 to 75 percent. The U.S. Fed wants to get off zero.”

Total Return Fund, run out of Pimco’s office in Newport Beach, California, returned 5.1 percent in the past year through Wednesday, beating 75 percent of its competitors, according to data compiled by Bloomberg.