Across asset classes, investors are worried about a bond market crash, according to a survey of fund managers around the world conducted by Bank of America Merrill Lynch.

They think that bond prices are frothy, showing signs of being in a bubble — meaning that prices are much higher than what bonds are actually worth.

Bond prices rose and pushed yields lower as investor demand grew and central banks, in Europe for example, bought bonds to lift inflation and fire up their economies. Bank of America Merrill Lynch. But at the same time, many investors expect that the yield curve will steepen. That's a situation where either long-term bond yields are rising faster than short-term bond yields, or short-term yields are falling faster than long-term yields. It typically reflects the expectation f0r higher inflation and stronger growth.

A Brief History of Bank of America in Crisis -- The Motley Fool

The share of fund managers that expect the yield curve to steepen was at the highest level since June in this survey. On Tuesday, Treasury yields neared their highest levels since June.

Fund managers think that bond yields will be the biggest driver of stock prices over the next six months, according to the survey.

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Meanwhile, investors prefer to hold cash over bonds. Their cash levels jumped to 5. According to the survey, the biggest concerns on investors' minds right now are a breakup of the European Union, a bond market crash, and a Republican winning the US presidential election.

The chart below shows that bond allocation relative to cash is at the lowest level since July as investors opt for the more liquid assets. Get the latest Bank of America stock price here.

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For security reasons you should upgrade your browser. Please go to Windows Updates and install the latest version. Trending Tech Finance Politics Strategy Lifestyle Sports Video All. You have successfully emailed the post. Investors are getting worried that a bond market crash is coming. Bank of America Merrill Lynch But at the same time, many investors expect that the yield curve will steepen.

Bank of America Merrill Lynch Fund managers think that bond yields will be the biggest driver of stock prices over the next six months, according to the survey. Bank of America Merrill Lynch Get the latest Bank of America stock price here. Bank of America Merrill Lynch Bond Market. Recommended For You Powered by Sailthru. Investors are getting worried that a bond market crash is coming Bank of America: Investors are getting worried that a bond market crash is coming Across asset classes, investors are worried Featured Why big data can make HR more important.

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