And the biggest driver of equity prices in 2024 will be — drumroll — the Fed.

That’s according to “an outright majority” of participants in the January installment of BofA’s closely-watched Global Fund Manager survey.

Specifically, the share which identified the Fed as the most important factor was 52%. 33% said corporate earnings. 68% said the Fed will be the most important factor for bond yields.

The poll also suggested investors have never been more bullish on short-term rates. More than nine in 10 panelists expect rates to be lower in 12 months, the bank’s Michael Hartnett noted. That’s higher than November of 2008.

Suffice to say no one (or virtually no one) is seriously concerned about a scenario where inflation re-accelerates and prevents the Fed from cutting.

Somewhat ironically in the context of that unanimity, just 17% expect a hard landing. By contrast, nearly three quarters expect a soft landing, and another 7% (give or take) are convinced of a “no landing” scenario which, you’re reminded, is roughly defined as a macro conjuncture in which the economy refuses to slow despite the Fed’s efforts to engineer below-trend growth.

The combined perceived odds of a soft or no landing scenario are now near 80%.

In December, a net 15% of survey panelists said a recession was likely for the US within a year. That net share tumbled to a mere 2% in January.

Profit expectations have improved commensurate with the perceived odds of a soft landing (and consistent with fading recession risk). There’s now “less focus on the need for balance sheet improvement by corporates,” Hartnett said.

When asked, “When do you expect the US economy to fall into recession?” the top answer was, colloquially, “I don’t.”

Officially, that answer was “No recession in the next 12 months,” and it garnered 41%.

Just so we’re clear: The odds of a recession are very low, according to fund managers, and yet rate cuts are a virtual certainty. I’m not fond of clichés but I’ll indulge: “What could go wrong?”

Speaking of things that could go wrong, the top tail risks in this month’s poll were, in order, “Geopolitics worsen” (25%), “hard landing” (24%), “higher inflation” (21%), “systemic credit event” (11%), the US election (11%), a banking crisis in China (3%) and “AI bubble” (2%).

Some 250 panelists with around $600 billion in AUM were counted among the responses.