Asian Stocks Rally as Cooling U.S. Inflation Boosts Fed Rate Cut Hopes 
Singapore GDP Grows 5.7% in Q2 2026 as AI-Driven Manufacturing Boosts Economy 
Asia Stocks Slip as Iran-Hormuz Tensions Lift Oil Prices, Dollar and Bond Yields 
China Home Prices Fall Again in June Despite Slower Pace of Decline 
Iraq PM Visits Washington as U.S. Oil, Gas Deals Take Center Stage 
Dollar Eases as Middle East Conflict, Fed Outlook and Japan Pension Policy Drive FX Markets 
European Stocks Slip as Middle East Tensions and Hormuz Threat Rattle Markets 
US Inflation Expected to Ease in June, but Fed Rate Hike Risks Persist Amid Middle East Tensions 
Goldman Sees Foreign Investors Driving India Stock Market Recovery 
Australian Business Conditions Hold Steady as Easing Cost Pressures Face New Oil Price Risks 
Asian Currencies Weaken as Stronger Dollar Weighs, Yen Supported by GPIF Repatriation Hopes 
Asian Stocks Rise as Softer U.S. Inflation Boosts Sentiment Despite Middle East Tensions 
ECB's Kocher Says No Inflation Spillover Yet From Iran Conflict, Warns Risks Remain 
South Korea’s KOSPI Triggers Trading Curb as AI Chip Stock Selloff Deepens 
Gold Price Holds Near Record High as Cooling U.S. Inflation Offsets Fed Caution 
Australia Consumer Sentiment Rises in July as Fuel Price Relief Lifts Confidence 
Institutional investors are becoming increasingly worried about rising inflation risks in the United States, while concerns over slowing economic growth continue to fade. A new Bank of America global FX and Rates Sentiment Survey released on May 15, 2026, shows that resilient economic data is forcing markets to reconsider the possibility of additional Federal Reserve rate hikes.
The survey, which included 60 fund managers overseeing approximately $869 billion in assets, highlights a major shift in investor positioning across global markets. According to Bank of America analysts, investors are now far more focused on upside inflation pressures in the U.S. than on recession or growth slowdown risks.
The latest findings reveal that 28% of respondents believe U.S. economic growth is already properly priced into markets, but inflation risks remain significantly underestimated. This figure doubled from 14% in the previous month, signaling a rapid change in investor expectations. In addition, 25% of fund managers now see the Federal Reserve as the central bank most likely to surprise markets with more aggressive interest rate hikes.
Growing expectations for tighter monetary policy are also affecting bond markets. Investors are reducing confidence in long-duration bond trades and becoming less optimistic about U.S. yield curve steepening strategies. At the same time, strong economic data is boosting bullish sentiment toward the U.S. dollar, with many investors expecting further gains in the Dollar Index.
In Europe, sentiment around the European Central Bank remains divided. While 58% of surveyed investors believe additional ECB rate hikes would help maintain price stability, 31% consider further tightening a policy mistake that could hurt growth.
Emerging market debt sentiment improved modestly in May, particularly for local currency bonds. However, Bank of America warned that ongoing geopolitical tensions could weaken investor confidence. Meanwhile, institutional capital continues shifting away from cash holdings and into risk assets, with long-risk positions and commodities becoming the market’s most crowded trades in 2026.
