BlackRock Remains Underweight on Long-Term U.S. Treasuries Amid Middle East Conflict
- BlackRock analysts indicate that oil futures suggest supply disruptions could last for weeks.
- Long-term Treasury yields have increased despite their typical role as a safe haven asset.
- The firm favors U.S. stocks over long-term Treasuries due to inflation risks and market conditions.
- International equities were outperforming U.S. stocks until recent airstrikes shifted the trend.
The ongoing conflict in Iran is contributing to a potential stagflationary shock, with energy supply chains under pressure. BlackRock remains optimistic that U.S. naval escorts may mitigate prolonged disruptions in the Strait of Hormuz, which is vital for global energy transport.
In summary, BlackRock’s cautious stance on long-term Treasuries reflects current geopolitical tensions and their impact on inflation and stock markets. The firm continues to prefer Japanese equities due to strong growth prospects amid these uncertainties. (Source)
