Systemic Credit Crunch Replaces Inflation as Fund Managers’ Top Worry
A systemic credit crunch has overtaken inflation as fund managers’ top fear this month as the biggest risk to the markets, according to a new poll.
At least 31 percent of respondents labeled a systemic credit crisis as the most significant threat to markets, followed by 25 percent choosing stubbornly high inflation as the largest tail risk.
According to the fund managers questioned in the survey, the most likely source of a credit event is U.S. shadow banking (i.e., non-bank financial intermediaries, typically unregulated), followed by U.S. corporate debt and developed-market real estate.
Inflation worries were followed by fears of continuous hawkish central bank policies, worsening geopolitical stability, a massive global recession, and the rising probability of a global stock market crash….