Domestic Politics
The Supreme Court, Senate, Fed, and other institutions have proved resilient so far under the Trump administration. US institutional erosion is overstated.
Stay overweight gilts despite renewed political turmoil in the UK.
The US-Iran deal offers temporary relief from oil supply risk, but both Hormuz and trade tensions could revive in 2027.
The US-China trade truce is getting bigger and better, but a grand strategic bargain on Iran and Taiwan is not happening.
Aggregate Senate betting market pricing appears too pessimistic on Democrats relative to state-level odds and early polling, suggesting a potential mispricing and a relatively sanguine attitude towards the still-unresolved conflict in Iran and its aftermath.
Peru is well established to elect a pro-market government in the June 7 run-off, with institutional constraints limiting left-tail policy risks. We will go long Peruvian assets when Hormuz volatility subsides.