Pimco Predicts Looming Credit Loss Cycle Amid AI Investment and Market Overconfidence

Pimco forecasts a significant "credit loss cycle," particularly impacting lower-quality credit and leveraged lending. The investment firm's report suggests that substantial AI spending could exacerbate economic disparities, leaving vulnerable borrowers exposed. Pimco also notes that current tight high-grade credit spreads, despite a bond selloff, signal market complacency rather than genuine resilience.