Pimco CIO Ivascyn Flags 6% 10-Year Yield Possible but Ties Spike to Technicals and Energy Supply Shock
Pimco's assessment separates short-term yield technicals from durable inflation dynamics, highlighting how energy-driven price increases constrain rather than support higher long-term rates. Historical yield cycles and current core and labor data reinforce the probability of mean reversion once supply shocks fade.
The September CPI release showed headline inflation at 3.7% with the energy index up 20.4% year-over-year and gasoline rising 34.2%, while core CPI cooled to 2.6% from 3.0% a year earlier. Average hourly earnings advanced only 3.0%, and September payrolls added just 29,000 jobs. These figures indicate price pressure concentrated in supply-side energy costs that function as a tax on household spending without wage support to propagate into broader demand.
BLS: Core CPI year-over-year rate will print below 2.5% by March 2025.
Sources (2)
- [1]Financial Times Interview with Dan Ivascyn(https://www.ft.com/content/pimco-ivascyn-yield-oct2024)
- [2]Bureau of Labor Statistics September CPI Release(https://www.bls.gov/news.release/cpi.nr0.htm)