Economic analysts at Bank of America Banking Group expect a significant decline in stock and bond prices in the coming months, in light of the rush of investors to accumulate cash in a way that has not happened since the emerging Corona virus pandemic in 2020.
The team of analysts, led by Michelle Hartnett, said in a report carrying the date, the day before yesterday: “The stock and credit markets have a strong appetite for reducing interest rates, and they do not fear recession enough,” adding: Stocks and bonds with good credit ratings will suffer a blow during the three or six months. coming.
interest increase
Bloomberg agency stated that the US financial markets are currently on the brink in light of the collapse of a number of US banks, and the failure of the Swiss Credit Suisse Group, whose competitor UBS intervened, with the support of the Swiss government to buy it, yet the major central banks did not back down, including So the Federal Reserve «Central Bank» of the United States to continue to increase the interest rate to curb inflation.
Last Wednesday, the American Council decided to raise interest again by 25 basis points.
cash flow
According to the Bank of America report, the volume of global cash flows, during the week until last Wednesday, amounted to about $ 143 billion, which is the largest rate of liquidity flows since March 2020, after flows amounting to about $ 300 billion during the previous four weeks.
The total asset value of the money management market rose to more than $1.5 trillion, its highest level ever. Previous increases in the value of these assets coincided with US interest rate cuts in 2008 and 2020.
Hartnett said: It is possible that the Federal Reserve will move towards a rapid rate cut during the next 12 months, but the Council will not start this cut before the number of jobs begins to contract.