Bank of America: Only Shifts to Bonds When U.S. Treasury Yields Hit 6%; Crowded Trade Risks Mount in 3.9% Cash Allocations

According to Trendfollowing Research, a Bank of America research report dated October 13, 2026 states that the October global fund manager survey shows cash levels at 3.9%, with 37% of investors indicating they would shift from equities to bonds once the 10-year US Treasury yield reaches 6.0%. The most crowded trades are long global semiconductors (45%) and short US Treasuries (27%). Meanwhile, 39% of respondents identify AI hyperscaler capital expenditures as the most likely source of credit events, and 76% expect the Federal Reserve to hold rates steady on October 28. Bank of America concludes that while the market is bullish, positioning is crowded, with bond yields and AI capital expenditures posing the greatest risks. For allocation strategy, they recommend contrarian trades: going long on bonds, REITs, and the consumer sector, while shorting equities, technology, banking, and emerging markets.