BofA strategist Hartnett says investors’ bullish bias in risk assets remains firm even as long-dated yields hit 5%

Investor sentiment toward risk assets has not swung decisively to the downside even as long-dated bond yields have climbed to the 5% area, according to Bank of America strategist Michael Hartnett.

Hartnett’s view, as reported in a market-news item, is that the “bullish positioning” that has supported higher-risk markets remains entrenched. In other words, even with a notable move in rates, he sees investors as still committed to holding assets tied to growth and risk rather than retreating to more defensive positioning.

The strategist’s framing highlights a common tension in markets: bond yields can move quickly on changes in inflation expectations or growth assumptions, but investor positioning across equities, credit, and other risk-oriented instruments can lag, reflecting hedging, benchmarks, and longer-term allocation decisions.

The reported piece also suggests Hartnett is not dismissing the significance of the 5% long-dated yield level. Instead, his argument is conditional, pointing to several factors that “typically” contribute to a more sustained shift away from risk assets that, in his assessment, have not yet fully materialized.

Hartnett’s comments underline how strategists often look beyond the level of rates to the set of market behaviors that historically accompany regime changes, such as whether investors are reducing exposure, whether volatility is rising in a way that forces rebalancing, or whether credit spreads and other risk gauges begin to tighten or widen in a consistent pattern.

Bank of America, through its strategy team, regularly publishes cross-asset commentary that translates macro developments into positioning and market-implied outlooks for investors. Hartnett is one of the best-known names in that tradition, frequently providing observations that connect bond-market moves to equity and credit performance.

Still, key details are not fully available from the market-news report itself. It does not lay out the specific “conditions” Hartnett referenced, nor does it provide the data points, survey results, or positioning measures he relied upon. It also does not clarify which particular long-dated maturity was described as reaching 5%, or the timing of that move relative to the rest of the market narrative.

The next question for investors is whether risk positioning eventually unwinds as yields stay elevated, or whether rates stabilize and allow investors to maintain their exposure. Watch for broader evidence of risk-asset de-risking, including signs that crowded positioning is being reduced, credit conditions are deteriorating, or equity volatility is forcing more conservative allocations.