Surging Bond Yields Replace AI Bubble Fears Among Fund Managers
According to Bank of America's September survey, global fund managers are now more concerned about surging bond yields than the potential for an AI bubble. The report highlights that a net 33% of surveyed managers view uncontrolled yield increases as their biggest tail risk, up from 27% in August. This shift reflects growing worries over U.S. inflation and rising government debt amid corporate spending on AI infrastructure. The survey also notes the recent rise in the 10-year Treasury note yield above 5.04%, a level not seen since the global financial crisis of 2007, with similar trends observed globally from Germany to Japan. The Federal Reserve is expected to raise interest rates at its upcoming meeting due to inflationary pressures and geopolitical tensions like rising oil prices linked to Iran. Managers remain skeptical about the effectiveness of the U.S. Treasury's buyback program in stabilizing yields, with 29% expecting it to fail entirely.
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Topics: AI bubble fears Federal Reserve policy global fund managers Treasury yields