PIMCO warns that a U.s credit-loss cycle is underway, with defaults expected to rise sharply among lower-quality borrowers, including leveraged and private credit companies.

The firm says AI-driven disruption could hurt heavily indebted businesses, while current credit markets appear complacent about risks. PIMCO favors intermediate-term government bonds, citing recession risks, persistent uncertainty, and the potential for future central-bank rate cuts.

PI INDUSTRIES LTD

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