BofA Survey: Retreat In US Duration Longs

Bank of America’s latest client survey finds that “US duration overweights have retreated back to levels not seen since early '23.”

• “While 63% of survey respondents think that the Fed will cut to a terminal rate below where the market is currently priced, our survey reflects some skepticism on the drivers behind the dovish Fed pivot.”
• “About half of respondents believe that the biggest motivation for the Fed's dovish communication was an improving inflation outlook. However, a larger share of respondents vs last month see upside risks to inflation in the US.”
• “This discrepancy is likely one factor that underpins survey respondents' more limited conviction on the US rates outlook.”