Bank of America is warning that a sharp jump in bond-market volatility is raising the risk of a broader deleveraging event, putting investors on alert as Treasury yields remain elevated and financial conditions tighten. Strategist Michael Hartnett pointed to a 35% surge in the MOVE Index over just two days, saying the spike signals growing stress inside the Treasury collateral system. Hartnett said a wider selloff could emerge if global financial stocks weaken further while bond-market volatility remains elevated, and he outlined another risk-off setup in which bond yields keep climbing even if oil prices fall. In Bank of America's baseline view, rising yields remain the most likely threat to the current economic and market boom, though Hartnett expects policymakers to act if market stress becomes severe enough, which could ultimately cap yields and weaken the U.S. dollar. The bank favors commodities and emerging-market assets while also highlighting potential opportunities if yields peak, including 30-year Treasuries, mega-cap technology, small caps, biotech and real estate.
Bank of America CorpBofA strategist warns bond volatility raises deleveraging risk and favors commodities/EM, but no company-specific financial event for BofA itself.
