Strategists: Iran War or Not, Interest Rates Will Stay High

Strategists have warned that even the end of a potential conflict in Iran will not permanently lower bond yields. According to experts, while a reduction in geopolitical risks may provide temporary relief for interest rates, inflationary pressures and central banks' tight monetary policies will keep rates elevated. Analysts note that an end to tensions with Iran could ease pressure on energy prices, but this would have a limited impact on interest rates. In particular, expectations for rate cuts by the US Federal Reserve (Fed) have been pushed back, keeping yields high in bond markets. Strategists emphasize that investors should focus on macroeconomic data rather than geopolitical developments. Persistent inflation above target and tight labor market conditions stand out as key factors preventing a decline in interest rates. Experts state that in the short term, geopolitical news flow may create volatility in markets, but long-term interest rate trends depend on monetary policy decisions. Therefore, they advise investors to be cautious with rate-sensitive assets. This is not investment advice.