Investors Turning to Cash Funds According to Bank of America Strategist Hartnett
Non-market uncertainties and interest rate expectations have accelerated global investors' search for safe havens, increasing interest in cash funds.
Bank of America strategist Michael Hartnett announced that investors are shifting toward cash funds at the fastest pace since the pandemic period and that these assets are not expected to be relocated in the near term.
Historical Shift to Cash Funds
According to information shared by Michael Hartnett from Bank of America, global investors are channeling money into cash funds at the highest rate since the pandemic period.
It is predicted that the massive capital waiting on the sidelines will maintain its current position until the steps taken by central banks.
Fed Decisions and Monetary Expansion
Strategist Michael Hartnett emphasized that the large amount of cash will remain there until large-scale monetary easing is implemented by the Fed.
In the week ending October 7, money market funds saw a cash inflow of $166.4 billion, the highest level recorded since April 2020.
Bond and Stock Markets
Globally rising interest rates are leaving stocks facing competition from safe investments such as bonds and cash.
According to BofA data, in the specified latest week, there was a capital inflow of $33.8 billion into bonds and $12.4 billion into stocks.
Future Expectations
Hartnett stated that large-scale reductions in cash assets generally coincide with easing cycles.
It is noted that the most likely catalyst for strong movements in stock markets in the coming years could be the US midterm elections.