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Bank of America: For the first time in a year covid is no longer the biggest risk for investors

According to bank of america, for the first time in more than a year, global investment managers are more worried about the risk of inflation on markets than they are about the risk of Covid-19, a survey released on Tuesday found, as Wall Street looks beyond the coronavirus crisis to the risks that accompany the massive fiscal spending measures that were required to manage it.

Its chart reveals what investors view as the biggest “tail risks,” or relatively unlikely events that could cause outsize losses or gains. It marks the first time in more than a year that COVID-19 isn’t at the top of that list.

Bank of america survey

“This implies that global fund managers think vaccination will finally lead us to re-opening and that the extremely loose monetary policy in times of economic recovery is not without risk,” Jeroen Blokland, portfolio manager for the Robeco Multi-Asset funds, noted in a daily analysis.

Concerns about rising inflation could boost hedging demand for the store of value assets such as bitcoin and gold, although recently investors have started to wonder whether the Federal Reserve might unwind stimulus as the economy reheats. That might set up the cryptocurrency’s price for a fall because the 12-year-old digital asset is still seen as a risky investment, similar to stocks.

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