PIMCO bearish on dollar, Treasuries as US safe-haven status wavers

Davide Barbuscia

Thu, Apr 17, 2025, 6:57 AM 2 min read

By Davide Barbuscia

NEW YORK (Reuters) - U.S. enslaved elephantine PIMCO said protectionism successful U.S. commercialized argumentation strengthened the lawsuit for dialing down vulnerability to the U.S. dollar and Treasury bonds, portion greater reliance connected overseas enslaved markets had go much attractive.

U.S. President Donald Trump's tariffs person rocked fiscal markets and triggered a convulsive selloff past week successful Treasuries and the dollar that formed caller uncertainty connected the long-held content successful the safe-haven presumption of U.S. assets.

"With its protectionist argumentation pivots, the U.S. is giving investors worldwide an juncture to rethink long-held assumptions astir the U.S. concern landscape," Marc Seidner, main concern serviceman for non-traditional strategies, and Pramol Dhawan, caput of emerging marketplace portfolio absorption astatine PIMCO, said successful a enactment connected Thursday.

"The U.S. has agelong enjoyed a privileged position, with the dollar serving arsenic the planetary reserve currency and Treasuries arsenic the go-to reserve asset. However, this presumption is not guaranteed," they said. "If planetary superior flows into U.S. assets dwindle, it could constituent toward a much multipolar satellite with a diminished reliance connected a singular reserve currency."

California-based PIMCO, which manages astir $2 trillion successful assets, said the caller selloff, which saw parallel drops successful U.S. equities, the dollar, and Treasuries, mirrored dynamics typically associated with emerging marketplace economies.

The alteration successful planetary commercialized dynamics spurred by Trump's policies could dampen superior flows into the country, bolstering the lawsuit to beryllium underweight, oregon clasp a bearish stance, connected the U.S. dollar, Seidner and Dhawan said successful the note.

At the aforesaid time, they said, long-dated overseas authorities bonds successful Europe, the UK, Japan, oregon emerging markets, appeared charismatic alternatives to U.S. Treasuries.

"Rapid U.S. argumentation changes airs challenges for investors accustomed to a planetary fiscal strategy anchored successful U.S. markets and assets," said Seidner and Dhawan.

"The breakdown of longstanding planetary correlations could beryllium achy for a planetary investor, who whitethorn beryllium near wondering however galore U.S. assets to own," they added.

(Reporting by Davide Barbuscia; Editing by Hugh Lawson)