As mainstream media experts like Bloomberg business editor Peter Coy tell Americans to “shut down the hyperinflation hype,” fund managers believe in a recent Bank of America survey, which collectively manages $ 630 billion, that inflation is currently the biggest Poses risk to the markets. In place of earlier concerns about Covid-19, inflation is currently the biggest risk to markets as government stimulus spending has worried investors.
As inflation concerns mount, mainstream media publications urge Americans not to worry
More recently, Federal Reserve chairman Jerome Powell showed little concern about rising inflation and never really said when the Fed’s easing policy would end. After Powell interviewed a job summit in the Wall Street Journal and showed no sign of concern, the 10-year US bond markets saw a massive sell-off.
After the March 4, 2021 carnage, some mainstream media publications simply wrote off people who were worried about inflation.
On that day, Bloomberg’s business editor Peter Coy wrote an editorial entitled “Tune Out the Hyperinflation Hype. It’s just meme economics. “The leading article describes the concerns as“ hype ”and combined the proposal with the overused term“ conspiracy theories ”. Coy even noted that fear of inflation is helping the leading crypto asset Bitcoin (BTC).
“Conspiracy theories have an insidious way of invading the real world,” explains Coy’s editorial. “Fear of inflation – if not total hyperinflation – explains the meteoric rise of Bitcoin,” added the Bloomberg business editor’s report.
The Bank of America Survey’s 220 investors, who manage $ 630 billion in AUM inflation, considered the greatest “tail risk” for Covid-19 concerns
According to the latest Bank of America (BoA) survey of 220 fund managers with assets under management of more than $ 630 billion (AUM), “higher than expected inflation” is a major risk for markets.
BoA survey participants found for the first time in over a year that inflation is more important than the coronavirus outbreak in terms of the future of the economy. After the craze in the bond markets, 35% of fund managers surveyed said US Treasury bond yields were the second largest risk.
For the first time since February 2020, coronavirus is no longer a top priority as inflation concerns take the lead.
Of the 220 fund managers with an AUM of $ 630 billion, 37% said inflation is currently the largest risk to investment markets. In addition, some participants were concerned about a possible surprise monetary tightening policy by the US Federal Reserve.
Despite the comment “meme economics” and the so-called “conspiracy theories”, 93% of the BoA participants surveyed expect inflation to rise in 2021. Although a decline in purchasing power is expected, almost half of the BoA surveyed fund managers are optimistic that the global economy will experience a “V-shaped recovery”.
This has led investors to seek an allocation in commodities, unlike certain technology stocks, the BoA report notes. An executive at foreign exchange firm OANDA says Jerome Powell and the Federal Reserve have some time before summer comes to deal with inflation issues.
“Powell will likely reiterate his best hits when discussing inflation and find that price increases later in the year will not be big or sustained,” said Edward Moya, senior market analyst at OANDA on March 15th Until then, to reduce concerns, ”added the analyst.
What do you think of the BoA poll showing fund managers are more concerned about inflation than Covid-19? Let us know what you think on this matter in the comments section below.
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