US inflation expectations hit highest since March 2022: Survey

A Bank of America survey revealed that inflation expectations in the US have climbed back to their highest levels since March 2022, marking the onset of the Federal Reserve’s most aggressive rate-hiking cycle in decades.

Around 2% of the 182 fund managers surveyed—who collectively oversee $513 billion in assets—anticipate that the Federal Reserve will raise interest rates further this year. The survey was conducted by the US lender between January 10-16.

Meanwhile, roughly half of respondents expect US economic growth to slow by 2026, down from 60% in December’s survey, according to a Reuters report.

Fund managers identified the Fed’s rate hikes, prompted by inflation, as the biggest risk to markets. This was followed by concerns over a potential large-scale trade war stemming from Trump-era policies.

Markets are also uneasy about Trump’s “America First” approach, which some fear could stoke inflation, particularly through higher tariffs on most imported goods.