US 10-year Treasury yield at 5.9% would spark shift to bonds from stocks, BofA investor survey
TLT•Investors said the US 10-year Treasury yield would need to approach 5.9% before bonds draw money away from stocks, according to Bank of America's survey. The October poll found investors had turned negative on global growth, while 76% expected the Federal Reserve to hold rates steady.
1. Yield threshold for bonds
The US 10-year Treasury yield would need to climb to nearly 6% before bonds become compelling enough for investors to move money away from stocks, Bank of America's latest Global Fund Manager survey found. Conducted October 2-8, the poll found investors were the least optimistic since June but remained bullish on macro and markets heading into the US midterm elections and third-quarter earnings season.
2. Survey positioning
A net 4% of investors expected global growth to weaken over the next 12 months, while inflation expectations fell to their lowest since January 2025. A net 1% expected higher long-term rates, down from 15% in September; 76% expected the Federal Reserve to hold its policy rate steady in October. Investors increased allocations to bonds, Japanese and UK stocks, and utilities, while reducing allocations to banks, US stocks and consumer discretionary. Long global semiconductors remained the most crowded trade, and investors cited a disorderly rise in bond yields as the biggest tail risk.
