PIMCO Warns Credit Loss Cycle Has Arrived, Signals Higher Losses in Leveraged Lending

According to PIMCO in its latest annual outlook, the investment management company warned that a credit loss cycle has arrived, with large-scale artificial intelligence investments potentially widening economic inequality and pressuring lower-quality borrowers. In a report by executives Richard Clarida, Andrew Balls, and Daniel Ivascyn, PIMCO stated: "Default cycles are re-emerging, and we anticipate higher losses in lower-quality credit sectors including leveraged loans and direct lending."
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