“‘Inflation shock’ worsening, ‘rate shock’ just beginning, ‘recession shock’ looming,” BofA chief investment strategist Michael Hartnett wrote in a note to clients, adding that in In this context, cash, volatility, commodities and cryptocurrencies could outperform bonds and stocks.
The Federal Reserve signaled Wednesday that it will likely start cutting assets from its $9 trillion balance sheet at its meeting in early May and will do so at nearly double the rate it did in its previous “quantitative tightening” exercise as it faces a inflation at a four-decade high.
A large majority of investors also expect the central bank to raise its key interest rate by 50 basis points.
In terms of notable weekly flows, BofA said that equity funds from markets Emerging markets had the biggest inflow in ten weeks at $5.3 billion in the week to Wednesday, while emerging market debt instruments drew in $2.2 billion, their best week since September.
It was also an eighth week of outflows for European stocks at $1.6 billion, while US stocks posted a second week of inflows, adding $1.5 billion in the week to Wednesday.
Source: Ambito
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