From December to February, hedge fund managers’ sentiment towards the government’s raising interest rates shifted dramatically: now most think rates will stay low through 2011.
Just two months ago, only 23% of the surveyed managers thought the fed would wait past 2011 to hike interest rates.
BofA Merrill Lynch surveyed a bunch of hedge fund managers and until this month, the majority of managers responded saying they thought that rates would be raised by Q3 2009.
But this month most said they thought interest rates would stay low until at least 2011.
BofA Merrill Lynch says “the reversals in Chinese equities, European banks and/or the dollar would signal ‘correction over’.”
In short: January’s excess optimism reversed.
Source: BofA Merrill Lynch Fund Manager Survey, Datastream.
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