The Fed’s behind the curve.

That was one message from the September vintage of BofA’s global fund manager survey, released on Tuesday in the long shadow of a worsening G7 bond selloff.

Indeed, a net 25% of survey respondents — which this month comprised 170 panelists with almost half a trillion in AUM between them — said monetary policy’s “too stimulative.”

As the figure on the right, below, shows, that’s the most since September of 2022, when the Fed really tightened the proverbial screws.

The figure on the left shows that for the first time in four years, investors expect a flatter curve.

Consider that another reminder: If Kevin Warsh failed to hike on Wednesday, he’d risk wrong-footing markets, with the likely effect of a bullish reversal at the front-end and a sharp bear move at the long-end.

Not surprisingly in light of the above, the net share of survey panelists expecting higher short rates was the most since September of 2022 as well.

Notably, inflation expectations actually slipped (and flipped) in this month’s poll, with a narrow majority expecting lower global CPI. You could call that a vote of confidence in monetary policy, but I’d be more inclined to suggest it reflects expectations of lower oil prices a year hence.

Amusingly, more than half (52%) of respondents in the poll said the Fed won’t hike before the US mid-terms. Although that was down 20ppt from August, it says a lot, none of it good, about Warsh’s credibility, that half of professional capital allocators doubt the new chair will chance Donald Trump’s ire despite market pricing which, by the last day of the survey period, reflected better than 70% odds of a hike at the September FOMC.

The survey cut-off date was September 10, a day before the BLS said core CPI overshot consensus for August, pushing market-implied hike odds above 90%. I assume more participants in the poll would’ve penciled in a hike with the benefit of that datapoint.