40% of Investors See a No-Landing Scenario, BofA Survey Shows

Bank of America's latest Global Fund Manager Survey shows the no-landing camp is growing fast. The survey showed 47% of respondents expected a soft landing, while 40% predicted a “no landing” scenario in which growth stays resilient, even as interest rates remain elevated.

The shift in sentiment

The survey covers 198 institutional fund managers overseeing approximately $540 billion in assets, making it one of the most closely watched monthly readings of institutional sentiment on Wall Street.

That distribution marks a shift from where sentiment stood as recently as August 2025, when a prior survey showed that 68% expected a soft landing and 22% predicted no landing. Only 5% expected a hard landing.

Why the no-landing call matters

The 40% of managers predicting a no-landing economy are making a specific claim: the traditional relationship between high interest rates and eventual economic weakness may not apply in the current cycle.

The argument rests on businesses having adapted to higher borrowing costs, household balance sheets staying healthy, and the labor market refusing to crack. If that view is right, the rate-cut trade gets rewritten.

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Positioning and the Fed

Bank of America's fund manager survey shows record equity allocations and 40% expecting a Fed rate hike. That is a meaningful tell: institutional money is leaning into risk while simultaneously bracing for the Fed to stay tight or even tighten.

If the no-landing camp is right, investors may need to rethink how they evaluate the relationship between interest rates and equity valuations. Multiples have held up despite higher-for-longer rates, and the survey suggests pros expect that to continue.

The geopolitical backdrop

More than half of the surveyed managers said they expected the Strait of Hormuz to reopen by June, a forecast that proved accurate after the U.S.-Iran agreement announced on June 14. That expectation appears to have unlocked a rotation into risk assets that had been waiting for clarity on the conflict that drove oil prices sharply higher.

Options market and stocks to watch

A no-landing world with sticky inflation and a hawkish Fed reshapes the tape. Watch flow in the following names for clues on how traders are positioning:

SPY: Watch for skew and dealer positioning as the soft-versus-no-landing debate moves benchmark vol.

TLT: Watch for renewed pressure on long-duration Treasuries if more managers price out cuts and price in hikes.

XLF: Watch for banks to benefit from a steeper curve and resilient growth, but only if credit holds.

XLE: Watch energy for the inflation-stays-hot trade, especially as Strait of Hormuz risk gets re-priced.

NVDA: Watch the mega-cap AI complex, which remains the most crowded long and the cleanest proxy for risk-on sentiment.

For more, see other news on macro positioning.

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