A Bank of America Fund Manager Survey released Tuesday found that for the first time since the pandemic, global investment managers fear the economic impact of inflation more than the negative effects of COVID-19.
A total of 220 fund managers participated in the March issue of the monthly survey. 37% of the respondents named inflation the biggest “tail risk” — a term used to describe an outlier event that may cause the most damage — according to CNBC. In this issue, only 15% of investors reported that “COVID-19” was the largest threat to the economy.
Some experts believe the $1.9 trillion COVID-19 relief bill will cause much higher inflation rates in the coming years, according to Bloomberg. (RELATED: Los Angeles Set To Receive $1.35 Billion From COVID-19 Relief Bill)
#inflation is now the biggest risk
— jeroen blokland (@jsblokland) March 16, 2021
93% of the surveyed fund managers said they expect the inflation rate to jump in the next 12 months, Forbes reported.
Head of fixed income strategy at Brean Capital Scott Buchta brought into question the size of the stimulus in February.
“How much stimulus can the market and the economy absorb?” Buchta said, according to Business Insider. “There’s growing concern about the impact that additional supply could have on the market should Congress force through a $1.9 trillion stimulus package that may be too big for the economy and the markets to absorb.”