Global investor confidence climbed in February to its highest level since June 2021, according to the latest Global Fund Manager Survey conducted by Bank of America.
The broadest measure of investor sentiment — based on cash levels, equity allocations and global growth expectations — rose from 8.1 to 8.2 in February.
However, BofA noted that fund managers were “overly optimistic” this month, warning that such elevated sentiment could make further gains in asset prices more difficult.
Expectations Around Potential Fed Leadership Change
The survey also revealed expectations regarding the potential nomination of Kevin Warsh as Chair of the Federal Reserve.
According to the results:
- 38% of respondents believe that if Warsh were appointed Fed Chair, U.S. Treasury yields would rise while the U.S. dollar would weaken.
- 21% expect yields to decline and the dollar to depreciate under his leadership.
Growth and Inflation Scenarios
The survey found that investors’ expectations for a “boom” scenario — defined as above-trend growth and above-trend inflation — reached their highest level since February 2022. A total of 36% of respondents anticipate such an outcome.
Despite this increase, “stagflation” — below-trend growth combined with above-trend inflation — remains the dominant view, with 42% of participants expecting this scenario.
Meanwhile:
- 14% foresee a “goldilocks” scenario (above-trend growth and below-trend inflation).
- 5% expect “stagnation,” where both growth and inflation remain below trend.
The findings suggest that while investor confidence has strengthened significantly, concerns about inflation and uneven growth dynamics continue to shape market expectations.
Source: Patronlar Dünyası/ Prepared by: İlayda Gök