Higher for Longer: Fed, Hormuz & the AI Rate Regime

Failed to add items

Sorry, we are unable to add the item because your shopping cart is already at capacity.

Add to basket failed.

Please try again later

Add to wishlist failed.

Please try again later

Remove from wishlist failed.

Please try again later

Adding to library failed

Please try again

Follow podcast failed

Unfollow podcast failed

Higher for Longer: Fed, Hormuz & the AI Rate Regime

Listen for free

View show details

The era of ultra-low yields isn't coming back. Three converging forces — a patient Fed, a Middle East supply shock, and a capital-hungry AI buildout — are cementing a structurally higher interest-rate regime. Sophisticated allocators need to act accordingly.

The Fed holds firm at 5.25–5.50%, with markets pricing just one to two 25bp cuts over the next 12 months. Sticky services inflation and AI-driven capex demand are keeping core PCE stubbornly above target, making duration risk at the long end increasingly difficult to justify.

Disruptions to the Strait of Hormuz are amplifying the problem — pushing energy prices and term premiums higher. BlackRock remains underweight long-term U.S. Treasuries and JGBs, favouring shorter-duration instruments and U.S. agency MBS for incremental spread.

The structural case is clear: AI infrastructure is driving unprecedented capital demand, permanently repricing real rates. Long bonds no longer reliably ballast multi-asset portfolios. Follow Hedgebra on LinkedIn, subscribe on Spotify and Apple Podcasts, and visit hedgebra.com for deeper analysis.

No reviews yet