Investors’ consensus view of the macroeconomy has flipped on its head in the past month.
In the latest Bank of America Fund Managers Survey released on Tuesday, 49% of respondents said they expect a “hard landing” for the global economy — where economic growth deteriorates before inflation fully retreats — in the next 12 months. Last month, just 11% of respondents had expected this outcome.
Conversely, a “soft landing” — where inflation falls to the Fed’s 2% target without the economy tipping into recession — is no longer the consensus. In the latest survey conducted from April 4 to April 10, just 37% of respondents said they expect a soft landing. This is down from 64% expecting a soft landing a month ago.
The shifts in sentiment reflect how economists have been discussing the potential impact of President Trump’s tariffs, with many expecting the new policies to boost inflation and slow economic growth. Some even believe the tariffs could push an already slowing US economy into recession later this year.
“The Fed had accomplished what many had thought was impossible,” BNP Paribas chief US economist James Egelhof told Yahoo Finance, pointing to a recent strong jobs report and inflation hitting its lowest level in four years. “It had brought us to the brink of a soft landing. Now, the tariffs change everything.”
