Analysis: Signs of Market Fatigue Under US-Iran Conflict, Strengthening Global Expectation That ‘High Interest Rates Will Persist Longer’

According to a research note from Bank of New York Mellon analyst Bob Savage, the market is showing signs of increasing fatigue. Bob Savage stated that the renewed escalation of the US-Iran military conflict, rising bond yields, and hawkish guidance from central banks are putting pressure on both stock and fixed-income markets. Meanwhile, investors are reassessing the sustainability of the rebound in global risk assets.

"Central banks are increasingly focusing on the persistence of inflation driven by energy shocks and stronger economic growth, which further reinforces the market expectation that ‘high interest rates will persist longer’ globally." He noted that the renewed exchange of fire between the US and Iran has driven up oil prices, the US dollar exchange rate, and US Treasury yields. At the same time, concerns over supply disruption risks around the Strait of Hormuz, coupled with declining strategic reserves, have kept the energy market in a state of turmoil. (Jin10)