Investors Believe the Biggest Threat to the Market is a Fed Misstep

March 31, 2022

Wall Street investors feel that the biggest threat facing the markets right now is the Federal Reserve erring in its attempts to tame high inflation, according to a recent survey from CNBC.

The survey polled 400 chief investment officers, portfolio managers, and investment strategists and found that 46% said the thing most likely to derail the stock market was a misstep from the Federal Reserve. Thirty-three percent said that raging inflation posed the biggest threat. Only 11% cited further Russian aggression, while just 4% said a resurgence of the coronavirus.

The survey echoes the concerns of many economists and analysts who have been skeptical of the Fed’s ability to ensure a “soft landing,” and that by beginning its tightening cycle when economic growth is already moderating, the Fed may tip the economy into a recession.

As for their outlook on the market itself, the majority of the respondents, 58%, see flat returns for the S&P 500 in 2022, with the index closing out the year in about the same place it is now. Many, 36%, are optimistic that the S&P 500 will be above 5,000 by the end of the year, and only 6% see a large correction taking the index below 4,000 at the year’s end.

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