Bank of America survey: Policy mistakes become investors' most worrying risk next year

U.S. stocks suffered the "Four Witch Days" last Friday: the three major U.S. stock indexes all closed down, the Dow Jones Industrial Average closed down by more than 500 points, and the 11 major sectors of the S&P 500 were wiped out. However, compared with short-term issues such as the market's single-day trend or whether the "Santa Claus market" can be delivered as scheduled, what worries the market more is the impact of the Fed's policy.

Last week, the Fed's last interest rate meeting of the year, as expected by the market, conveyed its intention to further tighten monetary policy. The latest dot plot of the Fed shows that the median forecast of Fed officials is that they will raise interest rates three times next year and three more times in 2023. But the market is currently betting on interest rate hikes much less often than the Fed implied. It is believed that investors generally feel that the Fed has not raised interest rates so many times.

At the same time, the Bank of America survey shows that the primary risk for investors to invest in 2022 is the policy errors of global central banks, including the Federal Reserve.

Article excerpted from the US Stock Research Agency