The money manager still expects global fixed-income markets to be anchored in the medium term by low equilibrium interest rates stemming in part from a global savings glut and high levels of debt. But trading is also likely to be more volatile as central bank actions may become less easy to predict. It said U.S. Treasury Inflation-Protected Securities offer a reasonably priced portfolio hedge against the possibility of price gains, which look a bigger risk than in the past decade.
Emerging markets though should benefit over time from the low rates and yields in the developed world, according to Pimco.