Stagflation Risks and Diverging Central Bank Paths Define Q4 Outlook

PIMCO’s Cyclical Outlook (Oct 2025), authored by Tiffany Wilding and Andrew Balls, explores the macroeconomic crosscurrents shaping markets.

• Three forces dominate: rising U.S. tariffs, the AI-driven investment boom, and institutional uncertainty, all set to increase volatility and widen performance gaps across economies.

• Bond markets offer durable opportunities, with today’s yields providing strong long-term return potential as central banks continue to ease and cash rates decline.

• Global diversification and viewing credit across a public–private continuum can unlock resilience and relative value in an uncertain policy and trade environment.

How should investors balance bond yield opportunities with tariff risks and technological shifts? Explore the full outlook for deeper insights.