Wall Street’s biggest fear isn’t Covid. It’s inflation

The findings underscore the thing that has changed drastically during the year. The growing confidence for the rollout of vaccines, easing health safety measure by the federal government, an unprecedented support.

“Feeling investor [is] unambiguously bullish “Bank of America strategists wrote in a report Tuesday.

US stocks have recovered quickly from the pandemic. 18,592 anatomical tables for ships to March 23. The index is up about 77% for the next reeling. NASDAQ is double the distance.

The hot contentslider

Uncle Sam is providing primary support for the economically football economy is much more likely to heal in a few months. Last week, Congress passed the American President Joe Biden’s needy Package $ 1.9 trillion.

Nearly half (48%) of fund managers polled by Bank of America now expect shaped recovery from 5 to 10% as of May 2020 in the future as well.

A sophisticated investors expect the economy by more than 91% of the record overcomes signaled confidence after the tax cuts were passed Trump in late 2017 during the early stages of recovery from the Great Recession.

Fearing increase ever. However, there is overdone?

However, all these optimistic interpretation – Assembly upon the individual incentive H – it does something with the king on Wall Street could overheat the economy.

That creates great fear in inflation will rise rapidly to the Federal Reserve to raise interest rates, short-circuiting the economic recovery and boom in the market. What has been done in the 1970s and early 1980s when Paul Volcker central bank has been ruled to be led aggressive interest rate with inflation hikes.

A record 93% of fund managers and higher global inflation to wait for the next 12 months, according to Bank of America. That is from 85% in February, he said.

However, US officials back on inflation fears. Over the weekend, Treasury Secretary Yellen said Huntersville move to higher inflation, but only temporarily.

Ed Yardeni, president of investment advisory Yardeni Research, about 10 million US workers, because they’re worried about runaway inflation unemployed until the pandemic.

“A 1970s-style wage-price spiral is probably, in our opinion, although the fiscal and monetary excesses of our government,” Yardeni wrote in a note Tuesday clients.

Tipping point in bond yields

And, first, it is for its own development to the feast of the candle the sign of only every 2013 when a region of the treasury is the bond of the the purchase of the latest investors that the Fed will gradually received his sight. The tree of the higher rates of Treasury when he was less acceptable to her to make the comparison to look to the greatness of the victory.

After crashing last spring to 0.3%, 1.6% for the 10 year Treasury rate recently climbed it. He goes for the spike moves investors pursue the timber along which the lower sharply.

How high yields, it would have to climb to derail the bull market?

Bank of America said the 10-year Treasury 2% “level is in the way of reckoning the tree. “Around the middle of fund managers surveyed said 2% to 10% because of the addition of the lunar which does not yield stocks. Similarly, about half of the investors told the 10-year Treasury rate of 2.5% to 2% sticks bonds to stocks.

Invest in the professional, but I do not see a bubble, it is certainly. Only 15% of the US stock market to think about a bubble, according to the Bank of America bananas. A tell-quarter stock market is an early stage in the bull market in a while 55% say it’s the late stage of the bull market.