March data from BofA’s Global Fund Manager Survey reveals the biggest drop in US equity allocation on record, coupled with the largest-ever increase in Eurozone equity allocation.
This signals a major reversal of the previously dominant long US /short Eurozone trade as investors pivot toward European markets.
Source: Global Fund Manager Survey BofA
The Fed: Rates, QT, and Uncertainty
In a unanimous decision, the Federal Reserve kept its benchmark interest rate in the 4.25%-4.50% range while issuing a stark reminder of rising stagflation risks by lowering its 2025 GDP forecast from 2.1% to 1.7% and raising inflation projections. The statement cited “Trump uncertainty” as a factor in its downgraded outlook, with Chair Jerome Powell acknowledging that tariffs, both existing and reciprocal, are already affecting economic activity. Although the dot plot still shows two rate cuts in 2025, projections shifted to a more hawkish stance than in December, with eight policymakers indicating fewer or no cuts at all.
The central bank also announced slowing its quantitative tightening (QT) program starting 1 April, reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion, from around $60 billion, a month before the first slowdown.
Markets rallied as stocks and Treasuries rose, relieved that despite the Fed raising its inflation forecast, it still expects rate cuts this year.
The Fed remains in a rate-cut cycle but prefers to pause a bit longer to assess the impact of fiscal policy, thereby leaving the door open for a potential cut in June.
Source: Bloomberg, Zerohedge
How Often Do Market Corrections Lead to a US Recession?
Deutsche Bank analyzed 60 S&P 500 corrections, including the most recent one, and found that in 12% of those instances, a recession was already underway in the preceding 12 months. Another 32% of corrections were followed by a recession within the subsequent 12 months. However, in 56% of cases, the economy avoided a downturn entirely during that timeframe.
Put differently, a recession and a market correction coincided only 44% of the time. The question remains: will this latest correction sidestep a recession, or are we about to see history repeat itself?
Source: The Kobeissi Letter
Gold Surges, Yet Precious Metals ETF Allocations Remain Low
Gold has soared by 40% year-on-year, fueled in large part by robust central bank purchases. Despite this strong performance, allocations to precious metals ETFs continue to hover near historically low levels. Although there has been a recent uptick in precious metals ETF allocations, there remains significant room for growth. This raises an intriguing question: could this trend indicate further upside potential for Gold in the near future?
Global Gold Market Capitalisation Is Skyrocketing
The bull market in gold has been truly historic, adding roughly $5.0 trillion in market value over the last 12 months, bringing its total market capitalisation to a record $20.1 trillion. Over the past six years, gold’s market cap has risen by nearly $12 trillion (148%). In 2025 alone, gold prices have advanced around 12%, marking multiple new all-time highs.
Furthermore, the gold-to-CPI ratio has soared to 9.2x, surpassing previous peaks of 8.4x in 1980 and 8.1x in 2011, underscoring gold’s remarkable performance.
Source: The Kobeissi Letters, Blossom
Bitcoin Ownership Is Less Than 4% Globally
Bitcoin adoption remains limited, with only around 4% of the global population currently holding BTC. The United States leads with approximately 14% of individuals owning bitcoin, while Africa has the lowest adoption rate at just 1.6%. Among the key barriers to mass adoption are a lack of financial and technical education, along with high price volatility.
In many developing economies, residents often prefer US dollar stablecoins due to their lower transaction fees and relative price stability compared to other cryptocurrencies.