Pimco’s Ivascyn Warns of a `Dangerous’ Credit-Ratings Dynamic

The chief investment officer of one of the world’s biggest bond funds is warning of “dangerous” assumptions in the credit market, where inflated ratings may be giving investors a false sense of security just as the Federal Reserve faces limits on its ability to step in.

“It is very, very dangerous to assume something has an investment-grade rating just because the rating agencies assign a rating to it,” Dan Ivascyn, chief investment officer at Pacific Investment Management Co., said on an episode of the Odd Lots podcast recorded as part of the show’s 10-year anniversary celebrations. “There’s been so much ...