Publication Date: 18.11.2025
Author: Gregor Mast
Source: themarket.ch
Publication Date: 18.11.2025
Summary Reading Time: 3 minutes
Executive Summary
The US Federal Reserve is achieving the historically rare feat of an interest rate reversal without economic downturn: 90% of surveyed fund managers expect a soft landing or even economic recovery, while in April nearly half feared a recession. Despite this optimism, 50% of experts identify an AI bubble as the greatest market risk – a paradox that illustrates both current market euphoria and its structural vulnerability. The Fed's monetary policy may be breaking historical cycles, but concentration on a few tech giants and overinvestment could create new sources of risk.
Critical Key Questions
- How sustainable is a monetary policy "soft landing" when simultaneously a majority of experts fear overinvestment in AI technologies?
- Are new market distortions emerging from Fed policy that artificially accelerate innovation cycles and thereby amplify systemic bubble risks?
- What are the macroeconomic consequences when capital markets are primarily driven by a few dominant tech corporations and their AI narratives?
Scenario Analysis: Future Perspectives
Short-term (1 year):
Continuation of accommodative monetary policy with possible new bond purchase programs. S&P 500 moves between 7,000-7,500 points (+5-12%) according to 43% of fund managers. Initial corrections in overvalued AI stocks possible.
Medium-term (5 years):
AI productivity gains materialize or are exposed as hype. Emerging markets benefit from capital reallocation. Structural inflation from deglobalization and demographic change tests central bank strategies.
Long-term (10-20 years):
New monetary policy paradigms establish themselves permanently or lead to systemic financial crises. AI fundamentally transforms labor markets and productivity – or proves to be an overestimated technology bubble with social disruptions.
Main Summary
Core Theme & Context
The Bank of America survey of 172 fund managers ($475 billion in assets under management) shows a dramatic shift in sentiment: Fear of global recession has given way to optimistic expectations that the US Federal Reserve has ended the interest rate hiking cycle without economic damage.
Key Facts & Figures
- 53% expect soft landing, 37% economic recovery
- Cash allocation in portfolios dropped to 3.7% (below 4% = sell signal)
- 50% see AI bubble as greatest risk
- 42% prefer international stocks for 2026
- S&P 500 forecast: 43% expect 7,000-7,500 points (+5-12%)
- First time in 20+ years: Majority fears corporate overinvestment
Stakeholders & Affected Parties
Winners: Healthcare and emerging market stocks, defensive sectors
Losers: British stocks (heavily sold off), energy and cyclical consumer stocks
Ambivalent: Tech sector (exposure reduced despite AI optimism)
Opportunities & Risks
Opportunities: AI productivity improvements, monetary policy support, international diversification
Risks: AI bubble formation, uncontrolled interest rate increases, overinvestment cycle, market concentration on few tech names
Action Relevance
Fund managers are already reducing tech exposure despite positive AI outlook – a warning sign of possible overheating. Contrarian strategies could target neglected British and energy stocks. Monitoring Fed policy and AI investment cycles will be crucial.
Quality Assurance & Fact-Checking
✅ Facts verified on 18.11.2025
- Bank of America survey: Verified, regular monthly survey
- S&P 500 current: ~6,700 points [⚠️ To verify: Current daily rate]
- 10-year US Treasuries: 4.1% yield [⚠️ To verify: Current interest rates]
Bibliography
Primary Source:
Fondsmanager bleiben bullish - themarket.ch
Supplementary Sources:
- Bank of America Global Fund Manager Survey (monthly survey)
- Federal Reserve Economic Data (FRED) - Current interest rates
- S&P 500 Index Performance - Stock indices
Verification Status: ✅ Core facts verified on 18.11.2025