Supply shocks may no longer be a temporary disruption. As they become more frequent and entrenched, the risk of second-round effects, where higher costs spill over into broader inflation, is rising. Central banks may need to respond differently.

Systematic, cost-aware tail-risk hedging may support portfolio downside protection while preserving strategic flexibility in volatile markets.

For investors still holding cash allocations, the current fixed income environment may offer a potential opportunity to enhance income without taking on significant interest rate risk.

Long-dated U.S. Treasury yields are in the spotlight following recent Treasury intervention. In our view, the recent rise in yields reflects underlying supply and demand dynamics, rather than concerns about U.S. solvency. Meanwhile, recent market repricing may create opportunities for active investors, especially at the front end of the curve.