Oil price shocks greatly reduce the probability of higher interest rates in the near term, the latest Bank of America Merrill Lynch Survey of Fund Managers said Tuesday. This prediction comes hours before the Federal Open Market Committee meets to discuss the federal funds rate. While three-quarters of investors expect to see some rate hikes within the next year, few expect those changes Tuesday or in the next few months, according to the report. Some of the Fed's reluctance in raising interest rates now is likely tied to rising oil prices, the BofA Merrill Lynch Survey suggested. As oil prices rise, investors are more concerned about corporate profitability and global growth. In this type of atmosphere, the Fed is less likely to tighten monetary policies and hike rates, according to the report. "A net 24% of asset allocators now expect corporate operating margins to fall over the next 12 months," the BofA Merrill Lynch report asserted. "This represents the sharpest month-on-month decline since the survey began asking this question in 2004. As recently as January, a net 10% were expecting margins to expand. A net 32% of fund managers still look for corporations to increase profits in the next year, but this is down significantly from a net 51% a month ago." Many of the fund managers surveyed see a shift toward stagflation and expect lower growth coupled with higher inflation and interest rate expectations, said Michael Hartnett, chief Global Equity strategist for BofA Merrill Lynch Global Research. Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research, added, "If the oil price reverses, this change in sentiment could prove fleeting." Write to Kerri Panchuk.