In a recent survey of global fund managers, Bank of America says fears about the state of the economy and of an incoming recession are at their highest levels since 2009.

“Whatever the outcome of the 2020 US Presidential election, we expect government spending to rise.”

The survey of 235 respondents was released Tuesday. The results of the respondents, who manage a combined $638 billion in assets, showed that 38% expect a recession within the next year — the highest percentage since the throes of the Great Recession in 2009.

The survey — conducted between Sept. 12 and 16, so before this week’s spike in oil prices — also found that fund managers aren’t expecting great things from the economy, ahead of a projected rate cut this week after the Federal Open Market Committee meeting Sept. 17-18. Only 21% of the fund managers expect a rate hike within the next 12 months.

Bank of America fund managers

According to Bank of America, this is a complete reversal from a year ago, when 87% of those surveyed expected higher short-term interest rates.

The reason for the reversal?

The ongoing trade war between the world’s two largest economies. More than one-third of respondents say the trade war is the “new normal,” and about 70% say no resolution between the two superpowers will happen before the next election.

The key takeaway from the survey, according to Bank of America, is that fiscal stimulus is “essential” to boosting stocks — meaning the bank is calling for more stimulus — which is an important aspect considering how much weight President Donald Trump puts in stock market gains.

Trump has repeatedly called for interest rate cuts, including down to zero or negative, as he tries to stimulate the economy ahead of the 2020 elections. Also of note, Bank of America expects government spending to continue to rise.

“Infrastructure spending (fiscal policy) is also the area of US economic policy where Fund Manager Survey investors think there is the most bipartisan support,” the report said. “Whatever the outcome of the 2020 US Presidential election, we expect government spending to rise.”

Bank of America fund surveys recession