Rates Spark: Even as things calm down, costs remain

Analysis of Recent Developments

Based on our interpretation of the current situation, it appears likely that the ceasefire in the Iran conflict will be maintained, potentially leading to a de facto conclusion of these particular tensions. The United States is expected to seek access to Iran’s stockpile of enriched uranium, and if successful, may reluctantly accept Iran taking on a supervisory—possibly discreet—role in overseeing the Strait.

Financial markets responded as anticipated, with a shift toward riskier assets and a general sense of relief. In terms of interest rates, short-term yields are facing less upward pressure, while in the US, expectations for rate cuts later in 2026 remain prominent, consistent with our previous outlook.