Investors are increasing their pre-Fed cash position

Respondents increased the amount of cash in their portfolios, according to a survey conducted by UBS Global Wealth Management of 3,000 people with assets of at least $1 million and 1,200 people whose companies have an annual income of $1 million or more.

The survey took place between January 4 and January 24, where the daily decline in the S&P 500 Index reached 12 percent. Survey results showed investors were worried about last month's crash in the US stock markets.

While the Fed is expected to start raising interest rates in March, 61 percent of survey respondents' cash in their portfolios increased by more than 10 percent.

"Inflation must be brought under control"

More than 80 percent of respondents said that controlling inflation should be the top priority for the Biden government. Investors surveyed expect inflation to stay higher for a long time.

UBS's report states that "in an environment of inflation and interest rate hikes, investors are waiting for the right opportunities to invest in sectors such as health and technology."

US Stock Exchanges had made a weak start to 2022 due to the rise in inflation and expectations of interest rate hikes. Although the stock markets have been on the rise from last month's lows, investors are still worried about the pace of monetary tightening by the central banks.

Surprisingly strong employment data in the US last week increased the expectations that the Fed will start interest rate hikes next month.

However, according to a Bloomberg survey, inflation in the country is expected to rise to 7.3 percent in January, the highest level in 40 years. Inflation data will be released tomorrow.