Bank of America's monthly fund manager survey showed that investors are 'most bullish' since November 2021, due to expectations of monetary easing by the Fed.
Currently, 82% of respondents predict that the Fed will start lowering interest rates in the second half of the year. Meanwhile, 78% of respondents said they considered a recession unlikely over the next 12 months. Last month, the International Monetary Fund said that the US economy's standout performance will be a major driver of global growth this year but could make America's inflation problem harder to solve. The IMF upgraded its forecast for US economic growth to 2.7% this year - 0.6% higher than it predicted as recently as January.
The Bank of America survey also found that expectations for global growth fell for the first time since November: a net 9% of respondents expect the economy to weaken over the next 12 months, compared with 11% who expected a stronger economy in the last survey in April. However, most investors do not expect a recession. The survey also showed that "long U.S. dollar" was the second most-crowded trade, overtaking "short Chinese equities".