Nearly three-quarters of fixed-income investors still view monetary support as either important or critical despite feeling confident about US economic growth, the recovery in Europe and activity in the emerging markets.
This is down from a high of 91% recorded in summer 2013, but then just 43% of professional money managers anticipated that US GDP growth over the coming year would be less than 2%.
In comparison, the latest survey by rating agency Fitch, which was conducted in February and March 2014, found that 89% of investors anticipated US growth of at least 2%-3% over the coming year.
Investors also shared a fairly robust view of lending and housing, and saw diminished event risks.
Employment remains an area of concern, however. While investors see progress in the labour markets, most believe the employment situation is worse than reported in official statistics. This scepticism appears to be a key ingredient in shaping the caution around the near-term ability of the US economy to sustain higher interest rates.
One half of investors surveyed believe the unemployment rate is modestly worse than reported and one third say it is significantly worse.
“Investors remain tethered to easy monetary policy,” Fitch concluded.
Sally Percy is editor of The Treasurer