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      BofA Analyst Warns $8 Trillion in Cash Will Remain Idle Without Fed Rate Cuts

      Bank of America (BofA) analyst Michael Hartnett has indicated that approximately $8 trillion in cash will not be deployed into the market unless the Federal Reserve implements interest rate cuts. This statement comes as money market funds saw a significant inflow of $166.4 billion last week, marking the largest increase since April 2020. Hartnett emphasized that without rate cuts, there will be no movement of this sidelined cash, stating, 'No rate cuts, no cash cuts.'

      In his market outlook, Hartnett provided several key predictions. He suggested a risk-off sentiment leading into the upcoming midterm elections, with potential for a 10% market move in either direction. He advised against increasing exposure to technology stocks, although he noted that the so-called 'Magnificent Seven' tech companies are likely to outperform semiconductor stocks. Additionally, he recommended starting to buy 30-year U.S. Treasuries, anticipating peak yield potential.

      Hartnett also highlighted selective buying opportunities in small-cap stocks and real estate investment trusts (REITs), while advising investors to maintain long positions in gold and commodities. He expressed optimism for emerging markets, particularly noting interest in Chinese technology stocks. The BofA Bull & Bear Indicator currently stands at 8.1, down from 8.8, indicating that the market remains in sell territory.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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