BlackRock: Iran conflict continues, there is a risk of stagflation impact.

BlackRock Investment Institute stated that the conflict in the Middle East is causing energy-led supply chain disruptions, which have vastly different impacts around the world. Strategists including Jean Boivin and Wei Li wrote in their report that market pricing indicates the disturbances will last for several weeks, not just days or months. In a global environment dominated by supply factors, this conflict has intensified inflation risks, which is also why US Treasury yields have risen slightly and these bonds have not acted as a safe haven. "The rising yields align with our view: the current risk is due to inflationary supply shocks, not demand-driven economic growth slowdown." "There is a risk of stagflation shocks, but it is not inevitable, as market pricing already reflects this." BlackRock currently underweights long-term US Treasury bonds and is optimistic about US stocks.