Fund Managers Don’t Expect Fed Rate Hike Until Second Half of 2010

Seventy-five percent of fund managers do not expect the Federal Reserve to increase the Fed funds rate until the second half of 2010 or later, according to the November BoA Merrill Lynch survey of 218 fund managers with $534 billion in assets under management. Twenty percent think this might not happen until 2011.

While 66% believe that the existing monetary policy is “about right,” 47% fear that inflation could rise within the next 12 months, up from 39% who thought so in October. Thus, 25% of the panel is overweight commodities as a hedge against inflation, up from 11% in October. Fifty-three percent is overweight emerging markets, up from 46% the month before.