Going into the year, we were constructive on global growth and thought inflation was under control, so we were big on international and slightly underweight duration. With this conflict, inflation is ramping up as a big risk; stagflation becomes almost the consensus. Duration of the conflict is key. If it goes on like one or two weeks, it's just some risk premium raised, but we can buy the dip. So far we haven't seen panic setting yet; the market is still relatively complacent.

In US Treasuries, we don't think it's the time yet. We think the curve will probably still bear flattening for the time being. But there are more opportunities in the EM space or in Eurozone space. We still like assets with abundant liquidity and quality assets, especially some that are more constructive on commodities. AI needs commodity, and we need to position our portfolio to be more constructive on commodity, especially LatAm bond market.

I don't think they should cut, actually. I think inflation probably will be stickier going forward because it's not just oil. If you look at all the commodities affected by the Strait of Hormuz—LNG, some fertilizer—it's probably more broad-based than the market is thinking. So I think it will have some pass-through effect, a pretty strong one. The Fed should not just simply look beyond this; it will have more repercussions in terms of the impact on inflation. It's probably more stagflation.