Massive stimulus from central banks in the U.S., China and elsewhere is driving bubble-like stock returns and could head off a global recession, according to Bank of America. “It’s the bubble dream,” BofA chief investment strategist Michael Hartnett wrote in his weekly “Flow Show” breakdown of where investors are putting their money. “Fed slashing, oil crashing, China inflating … and if this China stimulus don’t work then geopolitical risks [are] going to soar.” The observation comes a week after the Federal Reserve slashed benchmark rates by 50 basis points , and the same week China launched a bevy of stimulus efforts that Hartnett estimates could equate to $560 billion. With concerns rising over a moribund real estate market and consumer confidence on the wane, the People’s Bank of China emulated the Fed move with its own 50 basis point cut to its reserve requirement ratio for banks and is injecting cash into the financial system by selling sovereign bonds. The PBOC also will implement measures to support the stock market. Those measures come with other central banks also easing, helping to push the value of stocks globally to $123 trillion, their highest since October 2021, Hartnett said. Investors in turn are pumping money into stocks, with equities taking in another $10.9 billion and the annualized rate running at $363 billion, the second-largest ever. Under other circumstances, such aggressive measures might be viewed as desperation stimulus to fend off a recession. But while some indicators do point to a slowing in global growth, the abundant forecasts for recession have eased. “Fed cutting into recession is negative for risk assets, but Fed cutting with no recession is positive and investors firmly of view Fed + China is sufficient policy easing to short-circuit recession risk,” Hartnett wrote.