Hedge Funds’ Cyclical vs. Defensive Positioning

Hedge Funds’ Cyclical vs. Defensive Positioning In times of expected economic growth, investors prefer cyclicals over defensives. The current record-low hedge fund exposure to cyclical vs. defensive sectors offers a potential opportunity for contrarian investors. Image: BofA Global Research

Current Market Pricing for Fed Funds Rate

Current Market Pricing for Fed Funds Rate Despite initial expectations for significant interest rate cuts in 2024, the market is now showing less confidence in this outcome. Image: BofA Global Investment Strategy

Fed Funds vs. VIX

Fed Funds vs. VIX Given the lag effect of Fed rate hikes on the U.S. economy, should investors expect a near-future rise in the VIX, or is this time different? Image: Deutsche Bank

Fed Funds Rate Expectations

Fed Funds Rate Expectations Despite the initial anticipation of multiple rate cuts in 2024 as suggested by the Fed’s “dot plot,” the current market sentiment indicates a more reserved outlook, with fewer rate cuts in 2024. Image: BofA Global Investment Strategy

4-Week Flow Pace into Bitcoin Funds

4-Week Flow Pace into Bitcoin Funds There has been a significant decline in the 4-week flow pace into Bitcoin funds. Image: J.P. Morgan

Interest Rates – U.S. Federal Funds Rate Expectations

Interest Rates – U.S. Federal Funds Rate Expectations BofA expects a 3.5-3.75% terminal rate in this cutting cycle, up 50bp from their previous forecast. This suggests a need to tighten monetary policy to control inflation and maintain economic balance. Image: BofA Global Research

Fed Funds Rate and Fed Funds Futures

Fed Funds Rate and Fed Funds Futures Deutsche Bank’s forecast for the fed funds rate remains more hawkish than many mainstream projections, expecting a single rate cut in December 2024, followed by modest reductions in 2025. Image: Deutsche Bank

All Money Market Funds Total Net Assets

All Money Market Funds Total Net Assets Despite the U.S. equity market’s upward trend since its 2022 low, investors still have a strong preference for cash. This is evidenced by the recent achievement of another record high of 6.111 trillion in money market funds. Image: BofA Global Research

Money Market Fund Assets vs. Fed Funds Target Rate

Money Market Fund Assets vs. Fed Funds Target Rate Money market funds often experience outflows 12 months after the initial rate cut. This occurs as investors reallocate their investments and adjust their risk exposure in response to fluctuations in interest rates and market conditions. Image: BofA Global Fund Manager Survey