Bank of America recommends buying bonds and gold. The stock market boom after the Fed's interest rate cut has triggered bubble risks.

On September 20th, Jinshi data reported that Michael Hartnett of Bank of America said that the stock market’s boom after the Fed’s rate cut has raised the risk of a bubble, and bonds and gold have become hedging tools to resist economic recession or a new round of inflation. The strategist stated that the stock market is currently expecting the Fed to further loosen, and the S&P 500 index is expected to have a profit growth rate of about 18% by the end of 2025. Hartnett wrote in a report that investors are forced to chase rising prices. Nevertheless, ‘bubble risk’ is making a comeback, and he recommends buying bonds and gold on dips. The strategist also stated that in the case of a soft landing in the economy, stocks and commodities outside the United States are good targets, with the latter being a means of hedging inflation. Hartnett said that international stock prices are relatively cheap and starting to outperform US stocks.