Tracy Chen

I don't think they should cut, actually. I think the inflation probably will be stickier going forward, because it's not just oil. The market is waking up to a stagflationary environment driven by geopolitical supply shocks. As the Fed is forced to hold rates higher for longer to combat sticky inflation, the yield curve will continue to bear-flatten, causing long-duration US Treasuries to lose value. SHORT. A sudden credit event or banking crisis forces the Fed into emergency rate cuts, sparking a massive rally in long-dated bonds.

Chinese Government Bonds (CGBs) have been a true safe haven for the past four to five years due to the economic slowdown, property market struggles, and weak domestic demand.

Asian currencies like the Korean Won, Japanese Yen, and Chinese Yuan are very cheap right now and have room to rally against the US dollar, especially if China pushes to internationalize its currency.

The global bond selloff is structural, driven by fiscal indiscipline, massive defense and infrastructure spending, aging demographics, and geopolitical turmoil, not just the Iran war. Therefore, US Treasury yields will continue to rise, with the 10-year heading to 4.75-5% and the 30-year to 5.5-6%.

We need to position our portfolio to be more constructive on commodity, especially LatAm. The closure of the Strait of Hormuz is causing a broad-based commodity shock that extends beyond just oil to LNG and fertilizers. This prolonged supply constraint will keep energy and raw material prices elevated, directly benefiting broad commodity indices and oil-tracking funds. LONG. A rapid diplomatic resolution to the Middle East conflict or a severe global recession that destroys commodity demand.

We need to position our portfolio to be more constructive on commodity, especially LatAm. The closure of the Strait of Hormuz is causing a broad-based commodity shock that extends beyond just oil to LNG and fertilizers. This prolonged supply constraint will keep energy and raw material prices elevated, directly benefiting broad commodity indices and oil-tracking funds. LONG. A rapid diplomatic resolution to the Middle East conflict or a severe global recession that destroys commodity demand.