Investors have a Valentine’s Day message for new Federal Reserve Chairman: Don’t go breaking my heart. That’s the message coming out of the February Merrill Lynch Survey of Fund Managers, in which half the respondents say the Fed hasn’t finished raising interest rates. In addition, 67% say the yield curves will remain flat or become more negatively sloped over the next 12 months while 74% of respondents in February believe the economy will slide into a recession (compared to 86% in January.)
“February’s survey shows a change in tempo compared to January’s upbeat tune,” says David Bowers, Merrill Lynch‘s chief global investment strategist.
The survey also found that 31% are overweight commodities and 26% are overweight alternative investments, with just 7% overweight real estate investments.