The macro-economic outlook is weakening fast and could plunge the US economy into a recession as the Fed tightens its monetary policy to control surging inflation.
- In a note to clients, Michael Hartnett, chief investment strategy BofA, stated that inflation shock is worsening, with rates shock beginning, triggering a recession shock.
- Hartnett further stated that cash, volatility, commodities, and cryptos could outperform stocks and bonds.
- The Fed signaled that it is likely to start reducing assets from its $9 trillion balance sheet at its May meeting.
- A larger percentage of investors also anticipate the central bank to hike its key interest rate by 50 basis points.
BofA stated that the emerging market equity funds posted the biggest inflows in ten weeks at $5.3B in the week to Wednesday as emerging market debt channels attracted $2.2B, their best week since September.
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