Fed to signal taper by end of year: Bofa

In the latest Global Fund Manager Survey (FMS) by Bofa, 84 per cent participants anticipate the Federal Reserve to signal taper by year-end. Even global growth expectations have fallen drastically. “Twenty eight per cent investors expect the Fed to signal tapering at Jackson Hole, 33 per cent of investors think September federal open market committee, while 23 per cent of investors think Q4’21. Note that the timing of the first-rate hike has been pushed back into 2023,” said the report.

The Bofa Survey was conducted between August 6 and 12 with over 250 panellists with $749 billion in AUM participating. Global growth expectations have fallen drastically. August economic growth expectations are now at 27 per cent, the lowest since April 2020 and down from the 91 per cent peak in March 2021. Both growth and inflation have fallen sharply but FMS investors do not believe a recession will occur. A smaller majority of FMS investors think inflation is transitory at 65 per cent, while only 32 per cent say inflation is permanent.