Bond market unloved, $4 trillion at 4% allocated to Treasurys, lower yields possible unless $2000 checks change outlook.

Bank of America's chief investment strategist Michael Hartnett predicts a potential powerful rally in the bond market in 2026 due to its current unpopularity, unless disrupted by significant fiscal stimulus from Washington. Hartnett emphasizes three pillars - positioning, macro deterioration, and policy - for the case of lower yields. Despite the debate on slowing growth, investors maintain high exposure to risk assets, with Bank of America's private clients holding $4 trillion across portfolios, but only 4% allocated to Treasurys compared to 66% in equities. Hartnett views this imbalance as a contrarian indicator for lower yields and points to favorable macroeconomic conditions for bonds. The full story is available on Benzinga.com.