Recently, Pacific Investment Management Company (PIMCO) stated that due to the worsening fiscal situation in the United States, the company is bearish on the outlook for US long-term bonds, and plans to diversify risk by buying bonds from regions outside of the US. PIMCO favors short-term and medium-term US bonds while reducing their allocation to long-term US bonds, as inflation may rise and the US may issue more debt to cover the deficit. In the report, PIMCO mentioned that the US dollar is a global reserve currency, and US bonds are global reserve assets, therefore the US still holds a unique position. However, if borrowing is excessive, lenders may question the ability to repay all debts. Taking into consideration the sustainability of US debt and potential inflation catalysts such as tariffs and limitations on immigration affecting the workforce, the company is becoming more hesitant towards long-term borrowing. PIMCO has been making gradual adjustments in response to the increasing US deficit. Apart from reducing investments in long-term US bonds, the company is investing in the bonds of countries with better fiscal conditions such as the UK and Australia. The company also prefers to lend to companies in the public and private sector who can better withstand high interest rates.