(Bloomberg) -- Investors are pulling money from US equities and flocking into cash funds, Bank of America Corp.’s Michael Hartnett said, amid renewed concerns that sweeping tariffs are crimping economic growth.

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Nearly $28 billion was redeemed from US stocks in the week through Aug. 6, while money market funds attracted about $107 billion, the biggest inflows since January, according to a note from the bank citing EPFR Global data.

A record-breaking rally in the S&P 500 Index stalled last week as data showed a slowdown in the US labor market. Investors are also worried about the outlook for corporate earnings as President Donald Trump’s new levies took hold Thursday. The average tariff rate has now risen to 15.2%, well above 2.3% last year and the highest level since the World War II era.

The focus is turning to the Federal Reserve, with swaps markets pricing in about 100 basis points in rate cuts by mid-2026.

Hartnett said a majority of the bank’s clients are betting on a “Goldilocks” outcome, which implies an economy that’s running neither too hot nor too cold. He said investors expect a scenario where lower rates would fuel a rally in equities.

The strategist, whose recommendation on international stocks versus the US proved correct this year, has warned of a potential equity market bubble in recent weeks.

--With assistance from Michael Msika.

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