NEW YORK (CNN/Money) - Global money managers' expectations for the U.S. presidential election shifted dramatically in September, according to a new survey, with a large percentage now forecasting a victory for President Bush.

Just a month ago, a slim majority expected Sen. John Kerry, Bush's Democratic challenger, to win.

Of 290 fund managers surveyed by Merrill Lynch shortly after the Republican National Convention, about 66 percent said they believed Bush would win re-election in November, while just 20 percent expected a Kerry victory. Fifteen percent said they didn't know who would win.

When asked the same question in August, 41 percent of fund managers thought Kerry would win, while 37 percent thought Bush would win, and 22 percent said they didn't know.

Fund managers' outlook on the economy, corporate profits and global stock performance improved slightly in September, and Merrill Lynch suggested this may have been due in part to their changed expectations about the election.

It's no secret that many on Wall Street would prefer a second Bush term, fearing that Kerry would try to repeal tax cuts for the wealthiest Americans and that he would be less corporate-friendly in his regulatory policies.

Some 31 percent of fund managers said they believed a Kerry victory would hurt U.S. financial markets, while 14 percent said it would have a positive impact and 48 percent said it would make no difference. Seven percent said they didn't know.

Twenty-eight percent of managers said they believed global stocks were under-valued, while just 16 percent said stocks were too expensive. The gap nearly matched August's, which was the biggest in a year. As a result, fund managers' appetite for riskier investments improved, and they started putting a little more cash back to work in stocks.

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Nearly half those surveyed said they expected the global economy to weaken in the next 12 months, at 47 percent, while 33 percent thought it would get stronger, and 19 percent thought it would stay the same.

This outlook was slightly cheerier than August's survey, when 53 percent of fund managers thought the economy would weaken, but was still noticeably more pessimistic than in June, when 38 percent of managers expected a weaker economy.

Expectations for corporate profits also brightened, with 37 percent expecting improving profits, compared with 32 percent in August. Forty-six percent saw profits deteriorating, compared with 51 percent in August.

Again, though, the outlook for profits has worsened considerably since June, when 46 percent of managers thought profits would improve and 36 percent thought they would worsen.

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Sixty-eight percent of managers expect inflation to rise in the next 12 months, while only 12 percent think it will fall. While high, those expectations have slipped since May and June, when more than 80 percent of managers forecast higher inflation.

Still, 90 percent of managers expect short-term interest rates will be higher 12 months from now, compared with just 3 percent who expect lower rates.

Federal Reserve policy-makers are scheduled to meet next Tuesday and are widely expected to raise their target for the fed funds rate, a key overnight lending rate, a quarter percentage point to 1.75 percent.

And the Fed, the U.S. central bank, may still have many more hikes on the way, if global fund managers are correct -- 45 percent of them believe a 3 percent fed funds rate is "neutral."