Investors see US rates staying as high as 4 in long term
Stocks, risky corporate debt still trading on low rate view
Analysts warn of valuation slump due to elevated US rates
Money managers seek shelter in EMs, bank stocks

LONDON, April 17 Reuters Fear that interest rates in major economies will stay relatively high is creeping back and threatens a painful wakeup call for financial markets, big investors warn.

With traders laserfocused on expected summer rate cuts, global stocks remain near record highs and demand for debt issued by the riskiest companies is firm.

But asset managers and economists now expect only minimal monetary easing, especially from a U.S. Federal Reserve facing unexpectedly persistent inflation.

Big investors are not rushing to change long term holdings, but in a sign of things to come stock market volatility is around a sixmonth peak as traders debate how high the U.S. rate hurdle against which financial assets are valued will stay.

Global stocks will suffer a valuation drag from higher for longer rates, said Ann KatrinPetersen, senior investment strategist at the BlackRock Investment Institute, the research arm of the world39;s largest asset manager.

Amundi, Europe39;s largest asset manager, said in a note on Monday that U.S. stocks will lag globally for the next decade. It expects the equity and debt of companies in developing nations such as highgrowth India and mineralrich Chile and Indonesia to outperform.

Everyone is so focused on…