Articles

If there’s one theme running through the investment landscape in

recent months, it may well be fragility. There is the fragility of the

ceasefire in Iran, which appears to have collapsed at the time of writing;

the fragility of the monetary policy consensus, with a new Fed chair

inheriting an inflation spike just as markets had settled on a path of

easing; and the fragility of fiscal positions, with gilt yields brushing

5%, a projected $1.9trn US deficit before war costs, and governments

funding rearmament by scraping between departments.

Perhaps most pertinent of all is the fragility of the rally’s own

foundations, a sharp disconnect, in places, between soaring valuations

and the economic realities beneath them. Yet markets have absorbed

a war, an oil shock, and a hawkish policy pivot, and still finished the

quarter higher.