TechFlow News: On March 20, BIT (formerly Matrixport) released its weekly report stating, “Escalating developments related to Iran are increasing uncertainties surrounding energy supply, inflation trajectories, and the global growth outlook. Should the conflict spill over further and continue disrupting critical shipping lanes—such as the Strait of Hormuz—both the global economy and risk assets could face significantly heightened pressure. Markets had previously been pricing in expectations of more accommodative monetary policy this year; however, they have recently begun reassessing the pace of rate cuts—and even repricing risks toward a more hawkish policy stance.”
So far, markets broadly regard this shock as a temporary inflationary disturbance, implicitly assuming that supply-side and shipping disruptions remain relatively contained and will gradually ease within a reasonable timeframe. This view is also reflected in the fact that inflation expectations have only edged up modestly.
From a market-performance perspective, the pricing of geopolitical risk may have entered a new phase; the interplay among energy prices, interest-rate expectations, and risk sentiment warrants continued attention.
