Conflict in Iran since the beginning of March has upended the forecast path of interest rates across the world. Due to the spike in oil prices since the beginning of the conflict 1-year forward inflation expectations in the US and UK jumped above 5% for the first time since Russia's invasion of Ukraine and US CPI inflation in March jumped to 3.3% (the highest in four years). However, the recent downward trend in services inflation may aide the Federal Reserve to hold rates st

AI infrastructure capex dominated the narrative last month in both equity and bond markets. Equities sold off in two sections: firstly the hyperscalers (who are expected to spend $400bn on capex this year) as investors struggle to see a high return on such enormous investment; and secondly, software companies dropped over concerns AI will replace their businesses, surely meaning hyperscalers should capture this revenue. This market is far from efficient. However, in spite of

After an arduous process President Trump has nominated former Federal Reserve Governor Kevin Warsh to take on the reigns of the Fed in May; when Jerome Powell's term ends. We anticipate an initially dovish Warsh to take the helm but his hawkish past moderates fears of Trump interfering materially with the central bank's independence for the time being. We can therefore anticipate looser monetary policy and lower interest rates in the short-term; a boon for bonds. Credit typic