Coronavirus has been overtaken for the first time since the early days of the pandemic more than a year ago as the top risk that keeps investors up at night, according to a new poll of fund managers.
Money managers polled by Bank of America now see inflation and an unruly rise in borrowing costs like that seen during the 2013 “taper tantrum” as the key “tail risk” that could unsettle global markets.
The survey of investors with $597bn in assets under management highlights investors’ concern that the economic recovery from Covid-19, backed by unprecedented stimulus, may unleash a surge of price growth that could be difficult to tame.
Rising inflation expectations and bets that central banks, particularly the US Federal Reserve, may have to tighten policy sooner than planned have triggered a widespread sell-off in government bond markets — which investors worry could get worse.
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