PIMCO favors bond markets in countries such as Australia, Canada and the United Kingdom because inflation risks are less pronounced there than in the U.S., Tiffany Wilding, an economist, and Andrew Balls, chief investment officer for global fixed income, wrote in a 6-12 month outlook report.

"Central banks, which tightened policy in unison to curb the pandemic inflationary spike, will likely follow varied paths when cutting interest rates," they said. "While many large, developed market economies are slowing, the U.S. has maintained its surprisingly strong momentum, with several supportive factors poised to persist."

Such factors include larger pandemic-related stimulus measures, elevated fiscal deficits, and the artificial intelligence boom.

The economic policies of the candidates in the upcoming U.S. presidential election are also seen as potentially supportive of U.S. economic growth and detrimental for growth elsewhere, said PIMCO.

"Those factors supporting relative U.S. growth are also likely to contribute to stickier inflation in the U.S. in 2024," it said.

Fed officials have projected three rate cuts this year, but a string of recent strong economic data could delay the expected shift to a less restrictive policy rate.

PIMCO expects a so-called soft landing for the U.S. economy - a scenario where high interest rates cool inflation without tipping the economy into a recession - but said the risks of an economic contraction or stickier-than-expected inflation remained elevated.

"In the U.S., persistent inflationary risks look most elevated. Elsewhere, recession risks are still a chief concern," it said.

In credit markets, it sees U.S. agency mortgage-backed securities as attractive and prefers high-rated corporate debt to higher-yielding but riskier bonds of companies more sensitive to a potential economic downturn.