Institution
PGIM Research and Market Insights
PGIM maintains a base case of resilient U.S. economic growth, underpinned by persistent fiscal stimulus and robust AI-driven capital investment. While domestic prospects appear favorable, the firm highlights a significant divergence in global outlooks, explicitly elevating the probability of mild stagflation across the Euro Area and China. Geopolitical volatility, specifically stemming from the Middle East, remains a primary risk factor, with PGIM monitoring an oil price threshold of $130-$140 as a critical determinant for Chinese growth stability. Within credit markets, the firm observes highly supportive technical conditions characterized by record issuance from hyperscalers and strong demand in leveraged finance. Despite these robust technicals and narrow spreads, PGIM advocates for a disciplined stance, particularly in MBS, while assessing the path for Fed policy against potential inflation cooling.
2 reports available
Macro Uncertainty's Economic Effects
PGIM identifies robust U.S. growth at 2.5%+ but warns of sticky inflation and shifting global risks toward stagflation due to geopolitical tensions and oil shocks. Market technicals remain strong across IG and HY despite high issuance and tight spreads.
Weekly View From the Desk
The report analyzes key questions for H2 2026, focusing on potential geopolitical resolutions in Iran, US Fed rate cuts, and central bank divergence in Europe and Japan.
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