Central Bankers Are the Biggest Risk to Stocks in 2022, Survey Finds

A hasty policy shift by central banks anxious to tame surging inflation is the biggest downside risk for global stocks next year, according to an informal Bloomberg News survey of fund managers.

And with the post-pandemic rebound now past its peak, this month’s poll of 106 investors also shows that more market participants expect value stocks to outperform equities that soared this year on future growth expectations. While risks lurk, more than 40% of respondents singled out a more robust economic expansion as the main upside catalyst for 2022.

“We believe 2021 was a year of recovery and 2022 will be a year of resilience - investing in reshoring supply chains, digitalizing businesses, innovating in health care and building a more sustainable planet,” said Katie Koch, co-head of fundamental equity for Goldman Sachs Asset Management, which oversees about $2 trillion in assets. One of the best opportunities she sees is in U.S. small caps, as they give “exposure to the next generation of innovators and disruptors at attractive relative valuations.”

The results of the poll offer a glimpse at some common industry expectations and concerns heading into 2022, following this year’s ferocious rally that sent U.S. and European benchmarks to successive historic highs, after seven consecutive quarters of gains. Sentiment has soured recently, with major benchmarks slumping this week on concerns that record jumps in producer and consumer prices will increase pressure on central banks to hit the brakes on more aggressively.