Bank of America: Only Shifts to Bonds When U.S. Treasury Yields Hit 6%; Crowded Trade Risks Mount in 3.9% Cash Allocations

S, according to Chaowang Research, Bank of America's research report dated October 13, 2026 noted that the October global fund manager survey showed cash holdings at 3.9%, with 37% of investors stating they would only rotate from equities to bonds when the 10-year US Treasury yield reaches 6.0%; the most crowded trade was long global semiconductors (45%) and short US Treasuries (27%); 39% identified AI hyperscaler capital expenditure as the most likely source of credit events; and 76% expected the Federal Reserve not to raise interest rates on October 28.

Bank of America concluded that while the market remains bullish, positioning is crowded, with bond yields and AI capital expenditure posing the greatest risks. For allocation, the bank recommends contrarian trading: going long bonds, REITs, and the consumer sector, while shorting equities, technology, banking, and emerging markets.