BofA Survey Shows Investors Bracing for Stagflation Over Next 12 Months

Bank of America’s latest global fund manager survey found that most investors expect the global economy to land in a stagflation-like setup over the next 12 months. Stagflation generally refers to slow economic growth paired with inflation that stays elevated, a mix that tends to limit both the room for rate cuts and the ability of investors to assume stable disinflation.

The survey results, published through a report circulated by Yahoo Finance on Aug. 18, reflect an investor view that weak growth and high inflation may coexist rather than inflation returning quickly to lower levels. The finding points to broad-based caution among professional investors, even as policymakers continue to weigh how restrictive financial conditions should remain.

The Bank of America survey is designed to capture near-term positioning and expectations from fund managers around the world. In this August read, the central message was the expectation of stagflation in the coming year, according to the Yahoo Finance item describing the survey’s outlook.

While the Yahoo Finance post indicates that the survey also covers additional elements beyond the growth-versus-inflation outlook, those details were not included in the information provided here. As a result, it is not possible to responsibly enumerate the survey’s other questions or quantify other reported outcomes from the available text.

For Bank of America, the survey matters because it functions as a high-frequency read on how asset allocators are thinking about the macro environment. When investors prioritize a stagflation scenario, it can shape expectations for interest rates, the path of corporate earnings growth, and relative performance across equities, credit, and rates-sensitive assets.

In a stagflation environment, investors often struggle with a “two-front” problem: inflation may keep real yields and borrowing costs from falling as quickly as hoped, while weak growth can pressure risk assets. That dynamic can lead to more conservative positioning, wider dispersion across sectors, and increased sensitivity to incoming inflation and labor-market data.

Even so, the survey does not substitute for actual macro data, nor does it represent a central-bank forecast. It captures expectations as reported by fund managers, and those expectations can shift as new inflation prints, employment reports, and central-bank communications emerge.

What to watch next is whether the stagflation expectations reflected in the survey persist in subsequent waves, and whether markets interpret the next set of inflation and growth indicators as moving the world toward (or away from) that scenario. For BAC investors and observers, future updates on the survey’s broader findings, if disclosed, would also help clarify what participants are prioritizing alongside inflation and growth.