Pimco Says ‘Credit Loss Cycle’ Has Begun, Favors Quality Bonds

j3((pwhn6{kaqm5ie)t0l2i6_media_dl_1.png Bloomberg Article content (Bloomberg) — Pacific Investment Management Co. is warning that the “credit loss cycle is upon us” as heavy spending on artificial intelligence could widen economic outcomes and hit lower-quality borrowers. Article content Pimco’s Richard Clarida, Andrew Balls and Daniel Ivascyn said in the firm’s latest annual secular outlook report that “the default cycle is reasserting itself, and we expect significantly higher losses in lower-quality credit such as leveraged and private direct lending.” Article content Article content Articl…