Inflation Replaces Covid as Biggest Worry for Professional Investors

March 15, 2021

It has been a little more than one year since the Covid-19 pandemic upended the economy, and investors are starting to move on. For the first time since the pandemic started, the professional investors surveyed for Bank of America’s Fund Manager Survey have identified something other than covid as the biggest threat to the market.

The respondents found that inflation was the biggest threat to the market, with 37% of respondents identifying it as the biggest “tail risk” that could cause the most damage to the financial markets. Following that, 35% responded that the Federal Reserve unexpectedly tapering off its monthly asset purchases was the biggest threat. Such a move would roil the bond market.

Concerns over Covid were not totally absent, with 15% of respondents saying it remains the biggest threat, especially with regards to the vaccine rollout. However, that is less than half of the respondents who felt the same way as recently as last month.

The survey is based on responses from 220 investors with $630 billion in assets under management.

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