Fed will begin cutting rates again in September, says PIMCO's Mike Zudzil

Interest Rate Expectations - The market is pricing in a 100% chance of a rate cut at the September meeting [1] - PIMCO anticipates the Fed will likely resume cutting rates by 25 basis points in September [1] - The pace and extent of rate cuts will be dictated by incoming data [2] - There are differing views within the Fed regarding whether they are already behind the curve [4] Labor Market and Inflation - The recent unemployment report provided new information about the labor market's velocity and job creation [2] - Inflation data was largely as expected, offering no significant new insights to the Fed [2] - The pass-through from tariffs has not been as onerous as initially anticipated [3] Fixed Income Market Opportunities - Starting yields are a good indicator of returns in fixed income, currently around 5% [8] - Active management in fixed income can yield returns higher than 5% [9] - Fixed income offers a good return relative to risky assets [9] - Fixed income could potentially yield double-digit returns if the economy performs unexpectedly and the Fed responds forcefully [10]