Treasuries Sink as Oil Jumps on Iran War, Stoking Inflation Fears

12 snips

Mar 2, 2026

Guest

Cole Smead

Cole Smead, CEO and portfolio manager at Smead Capital Management, on energy markets and oil supply risks. Marcelo P. Lima, founder of Heller House, on fintech efficiency, layoffs and AI implications. Michael Contopoulos, deputy CIO at Richard Bernstein Advisors, on equities, bonds and liquidity. They discuss oil spikes from Middle East conflict, inflation and bond moves, fintech cost cuts, and portfolio positioning amid volatility.

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INSIGHT

Geopolitical Conflict Raises Inflationary Risk

Wars tend to be inflationary, not disinflationary, and markets are pricing that through higher Treasury yields.
Michael Contopoulos points to oil/natural gas disruptions, ISM input prices and PPI as evidence pushing inflation up since core PCE bottomed last April.

INSIGHT

Private Credit Illiquidity Can Trigger Market Stress

Illiquid credit products create a systemic risk when holders must sell but can't, forcing sales of liquid assets and widening spreads.
Contopoulos warns private credit's illiquidity can amplify stress even without mass defaults.

ADVICE

Shift To Short Duration And High Quality Income

Tilt portfolios away from liquidity-driven, long-duration, speculative assets and toward shorter-duration, dividend-paying and high-quality fixed income.
Michael Contopoulos recommends underweighting speculative US tech and China and overweighting value, short-duration corporates and dividend names.

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Oil surged as the Iran war threatened to snarl shipping lanes, stoking inflation fears that pummeled bonds amid diminishing odds for a rate cut. The dollar rose. Stocks erased losses.
Also weighing on Treasuries were figures showing manufacturing expanded, with input prices jumping. Ten-year yields headed toward their biggest advance since April. The S&P 500 was little changed after a slide that earlier topped 1%. Energy and defense shares gained. Several tech firms with solid balance sheets rallied. Airlines sank. Gold topped $5,300.

The near halt to traffic through the Strait of Hormuz and disruption at a big refinery in Saudi Arabia underscored the threat to oil supplies. West Texas Intermediate jumped 6.3% to settle at $71.23. European natural gas prices soared as Qatar shut the world’s largest LNG export plant.

As US-Israeli strikes on Iran reverberated across the Middle East, President Donald Trump called on the nation’s leaders to capitulate, while the Islamic Republic’s security chief ruled out negotiations. US Defense Secretary Pete Hegseth rejected the idea of an “endless” war.

Today's show features:

Michael Contopoulos, Deputy Chief Investment Officer at Richard Bernstein Advisors, on the equity and fixed income market reaction to the latest armed conflict in the Middle East
Mona Yacoubian, Director and Senior Adviser, Middle East Program at the Center for Strategic and International Studies, on the major Middle East escalation as the US and Israel battle against Iran and its proxies
Marcelo P. Lima, Founder and Managing Partner at Heller House, on the threat of AI to fintech jobs following Block’s 40% staff reduction
Cole Smead, Chief Executive Officer and Portfolio Manager of Smead Capital Management, on the energy market reaction to the military action across the Middle East

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