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Macro US Stocks

BofA’s Hartnett Warns Risk-Off Mood to Dominate as Real Yields Hit 3%

Bank of America strategist Michael Hartnett expects risk aversion to dominate markets over the next three to four weeks, citing rising real yields, the US midterm elections and AI-themed trades. He said this summer’s “extreme bullish sentiment” has ended, with global bonds selling off pushing inflation-adjusted real yields to 3%. Hartnett’s team expects the Fed to hike rates in October to “restore credibility,” and sees a rising chance of a Democratic wave in November’s midterms.

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AI take

Hartnett's call matters less as a forecast than as a sentiment marker: the strategist who flagged this summer's extreme bullishness now says that regime has ended, and the trigger he names — real yields at 3% — is the same discount-rate pressure that tends to weigh on long-duration assets, including crypto and tokenized real-world assets. The political layer is the underappreciated part: a Fed hike framed around credibility plus a possible Democratic wave introduces two macro catalysts that markets cannot price cleanly. Whether risk-off actually dominates the next few weeks, and whether the AI trade decouples from the broader drawdown, is the open question.

Generated by AI for reference only.

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