JPMorgan PIMCO: The bond market underestimates recession risk – a good buying opportunity now

SighingCashier · 2026-03-30T01:45:50+00:00

Major bond fund managers on Wall Street believe that the market is underestimating the risk of war between the United States and Iran, which could lead to a sharper economic slowdown. Goldman Sachs forecasts about a 30% chance of recession, while PIMCO believes it is over one-third. As the market realizes that economic growth is being affected, Treasury yields will decline, and the current high yields will become investment opportunities.

SighingCashier

2026-03-30 01:45:50

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Some large bond fund managers on Wall Street believe financial markets are underestimating the risk that a possible U.S. war with Iran could cause a sharp slowdown in an economy that is already weakened. That includes fund managers at Pacific Investment Management Company (PIMCO), JPMorgan, and others, who expect a rebound in the bond market, leading to yields falling. Current yields have generally already risen to attractive levels.

Goldman Sachs says the likelihood of an economic recession over the next 12 months has risen to about 30%, while Pimco believes the odds are even more than one-third. When the market ultimately understands that economic growth will be affected more negatively, it will push Treasury yields lower.

At present, concerns among some long-term bond investors about inflation have completely outweighed the threats facing the economy, prompting them to massively sell bonds. This, in turn, has created an opportunity to enter the market now and lock in high yields.

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