zerohedge.com / by Tyler Durden / Jul 14, 2017 3:55 PM
In a dramatic appeal for rationality at the Fed, Bank of America’s global FX strategy team today released a note titled “take that punch bowl away”, which laments that while central banks backtracked from their hawkish recent rhetoric this week, it warns that “they will be sorry if they allow bubbles” and predicts that vol will increase this fall adding that the bank remains “cautious and selective in EM FX, despite the Fed-triggered rally this week.”
The note comes 24 hours after BofA’s chief strategist Michael Hartnett warned that “the most dangerous moment for markets” will likely come when “rising rates combine in three or four months’ time with an inflection point in corporate profits. In anticipation of this, we would use the next couple of months to buy volatility, and within fixed income slowly reduce exposure to IG, HY, and EM bonds.”
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