TREE NEWS reports: Bank of America strategist Michael Hartnett argues in his latest Flow Show that the most bullish event for risk assets before year-end would be a Fed rate hike on Oct. 28, as it would cap runaway long-end Treasury yields. Global central banks have delivered 54 rate hikes in 2026, their first net tightening since September 2023. Cash funds drew $166.4 billion in the week to Wednesday, the largest inflow since April 2020.
BofA’s Hartnett: A Fed Rate Hike in October Is the Most Bullish Event for Risk Assets
Hartnett's framing is a contrarian one: a hike as a bullish signal rests on the idea that it would anchor the long end rather than tighten conditions further. The scale of the cash build-up suggests positioning is already defensive, which is what gives the contrarian case its edge. The open question is whether policymakers would read a hike that way, or whether the tightening already delivered by global central banks keeps risk assets capped regardless.
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