The Iran war delivered a curveball to investors in March. Energy prices surged, pushing inflation expectations and long-term interest rates higher. Forecasts for Federal Reserve interest rate cuts were lowered. Stock prices tumbled around the globe following a promising start to 2026.
There is much riding on the length of the war and the extent and duration of the energy shock stemming from Iran's near-closing of the Strait of Hormuz. Jeff Sherman, deputy chief investment officer of money management firm DoubleLine, notes that Treasury rates have marched higher even when some signs of a weakening economy at home would suggest a move in the other direction.
