Thirty-five percent of global fund managers surveyed this month by Bank of America Merrill Lynch believe the Federal Reserve will not raise interest rates until the second half of 2010, while one out of six foresee no rate hike until 2011.
Forty-seven percent expect global core inflation will increase in the next 12 months, up from 39% in October.
The managers were 25% overweight commodities and 53% overweight emerging market equities in November, up 14 percentage points and seven percentage points, respectively, from October.
“Investors see inflation as a greater risk than deflation and are hedging that risk with overweight positions in emerging markets and commodities, and an underweight position in the U.S. dollar,” Michael Hartnett, chief global equity strategist at BofA Merrill Lynch Global Research, said in a news release.
Twenty-two percent said Europe is the most undervalued global market.
Survey authors Gary Baker, European equity strategist at BofA Merrill Lynch Global Research, and Mr. Hartnett were not available for comment.