PIMCO Links Fed, China, Commodity Deflation & Market Concerns

Noting that scientist Ivan Pavlov trained dogs to salivate in anticipation of receiving a tasty reward, Pavolv’s experiments translate into the current market environment, a recent PIMCO strategy note observed. Investors have become trained to react negatively simply at the anticipation of a Fed rate hike, and the Fed is accomplishing a task that hasn't been successfully executed in the postwar era, they note.

PIMCO: Fed is eliciting typical Pavlovian response, causing markets to shudder at the thought of a rate hike

“In 2015, market volatility has been rooted in a phantom rate hike from the Federal Reserve, which throughout the year has been ringing a...