Oil prices rise, US-Iran conflict, will US bonds really collapse?
At the beginning of this year, everyone thought the Federal Reserve would slowly cut interest rates, and central banks around the world were quietly buying US bonds. Suddenly, the US-Iran conflict broke out, and everything changed.
As oil prices rise, inflation follows, and the possibility of the Federal Reserve raising interest rates emerges again. The dollar strengthens, and US bonds are naturally sold.
Now many asset prices are tied to this war. To put it simply, it's inflation driven by rising raw material prices and soaring costs. To curb inflation, money must be tightened, and if that happens, US bonds will be hit.
But this situation doesn’t only lead to bad outcomes. If Iran really bombs all US facilities in the Middle East, and the Strait of Hormuz is closed, the credibility of the US will drop, inflation will surge, and US bonds might not hold up.
However, if the three parties quickly reach a ceasefire, the strait reopens for shipping, the Federal Reserve continues to cut interest rates, and inflation gradually decreases, US bonds might even rise a bit, and central banks may dare to continue pumping liquidity.
Now, no one can say which path will be taken in the end. Those who truly understand are waiting for signals, not just gambling.
If you want to know how to avoid losses in both scenarios, we can discuss it in detail and prepare strategies in advance.