Bank of America: Investors believe the Fed needs to cut interest rates significantly to avoid a recession

Despite the turmoil in global financial markets, investors' optimism about U.S. tech giants and expectations for a soft landing for the economy have not diminished, according to a global survey by Bank of America. The survey, which polled 189 participants with a total of $508 billion in assets, showed expectations for a soft landing rose to 76% from 68% in July. Despite this, participants' expectations for global growth have fallen sharply, with 47% of respondents now expecting a weaker economy over the next 12 months. A U.S. recession has replaced geopolitical conflict as the biggest tail risk. "The core optimism about a soft landing and U.S. large-cap growth stocks has not changed," Bank of America strategist Michael Hartnett wrote in a report. "It's just that investors now believe that the Fed needs to cut interest rates more aggressively to ensure that there will be no recession." Earlier, technology stocks led the U.S. stock market plunge, plagued by overvalued valuations and concerns that the Fed would be too slow to cut interest rates to prevent a recession. (Jinshi)