On My Mind: Geopolitical shock meets structural trends

The US-Iran conflict has raised near-term market volatility, but the larger investment story is the way it reinforces deglobalization and a rising productivity cycle. Energy disruption and supply-chain fragility are likely to keep inflation pressures elevated, while stronger US productivity and the spread of innovation point to a higher long-run neutral rate. That combination supports a bias toward higher bond yields over time, even if markets remain calmer than the IMF’s more pessimistic outlook suggests.

For investors, this argues for caution on duration and selectivity in credit, where yields still look attractive despite tighter spreads. The uneven global impact of these shifts should also create opportunities in regions and sectors with stronger fundamentals. In this environment, flexibility matters as much as conviction.