PIMCO warns of potential U.S. credit rating downgrade due to fiscal deterioration and debt ceiling negotiations.

From Yahoo Finance: 2025-04-02 08:35:00

PIMCO’s CIO, Daniel Ivascyn, is cautious on the dollar, citing tariff uncertainty and recession risks. The bond giant is underweight the U.S. currency across portfolios. Trump’s new tariffs escalate trade war fears, risking cost increases and disrupting global trade. Ivascyn sees a potential for Fed rates to rise.

Ivascyn warns of a possible U.S. credit rating downgrade due to fiscal deterioration and debt ceiling negotiations. Fitch previously downgraded the U.S. sovereign rating to AA+ in 2023. Moody’s projects a multi-year decline in U.S. fiscal strength, with debt to GDP ratio rising to 130% by 2035. Concerns over debt levels and deficits persist.

Read more: PIMCO turns more cautious on dollar, says could see US rating downgrade this year