US economy: Bank of America fund manager survey shows most are betting on stagflation ahead

Hopes of a soft landing are slim among fund managers, according to Bank of America’s survey. Bloomberg.

Ms Li sees a US growth slowdown, earnings downgrades and elevated price pressures, justifying the firm’s underweight positions in developed-market equities and bonds, though it is ready to put some cash back into corporate credit.

The pessimism contrasts with a bout of ebullience sparked by last week’s US inflation report suggesting price pressures may be peaking.

As rate rises spark bear markets in stocks and bonds, the Fed has gone from a friend in the bull times to a newfound foe.

Citi, for one, is touting the idea of the “Powell Push”, with the Jerome Powell-led central bank forced into growth-sapping rate increases on still-raging inflation ahead.