(Boursier.com) — Beware of the growing risk of recession, warn BofA teams in their weekly note. “An ‘inflation shock’ which is getting worse, a ‘rate shock’ which has only just begun, a ‘recession shock’ which is coming”, summarizes the director of investments of the American bank, Michael Hartnett.
Minutes from the Federal Reserve’s latest monetary policy meeting, released on Wednesday, show the U.S. central bank could begin shrinking its balance sheet as early as next month and plans to do so at a twice the pace. faster than during the previous phase of “quantitative tightening”.
In this ‘adverse’ context, operators continued to abandon European equities. According to EPFR data taken up by BofA, European equity funds indeed suffered an eighth consecutive week of net outflows, amounting to $1.6 billion, while US equity funds benefited from a second week of net inflows (+$1.5 billion). In addition, funds specializing in emerging debt attracted $2.2 billion in the week ending Wednesday, their best week since September.
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