The two firms are both seeing signs of rising inflation
Citing - tight labour market, to boost wages which will lead Americans to spend more & therefore push up consumer prices
- Add in a weak USD
- Prospects the Fed delay raising interest rates until 2018
- "The underlying trends in core inflation will be higher," said Gemma Wright-Casparius, a senior money manager at Vanguard
- BlackRock's Martin Hegarty "TIPS are incredibly cheap"
PIMCO has a slightly differnet view, but not kuch:
- "The economy is stronger and eventually during this second half of the business cycle inflation should trend higher," said Jeremie Banet, a fund manager at Pimco, which oversees $1.6 trillion. Unlike Vanguard and BlackRock, Pimco sees inflation remaining below 2 percent until next year. But Banet says the firm is still overweight TIPS because they are undervalued.
Via Bloomberg, more here at the link