Situation Room Consumer vs Iran

The report analyzes the impact of the Iran war escalation on US credit markets, predicting higher inflation and a more hawkish Fed. It recommends positioning for a steeper IG spread curve and notes the continued resilience of the US consumer.

Key Takeaways

• 1.Iran escalation increases inflation risk, leading to a more hawkish Fed and higher rates.
• 2.Investment Grade (IG) credit strategy focuses on 5s10s spread curve steepeners and fading cyclical sector weakness.
• 3.US consumer spending remains surprisingly resilient despite elevated gasoline prices.

Table of Contents

• Situation Room
• Consumer vs. Iran
• Resilient consumer
• Curve and sector positioning
• Daily supply snapshot
• Daily dealer inventories update
• Daily HG fund flows
• Daily foreign demand tracker
• Important Disclosures

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