JPMorgan, Pimco Say Bond Market Is Underestimating Slowdown Risk

Major bond-fund managers warn markets are underestimating the risk that a US war with Iran could cause a sharp slowdown in an already sputtering US economy. Such an outcome would likely drive risk-off flows into safe-haven assets, pressure Treasury markets and yields, and lift energy prices, increasing volatility and downside risk for risk assets.

Analysis

Major bond-fund managers warn markets are underestimating the risk that a US war with Iran could cause a sharp slowdown in an already sputtering US economy. Such an outcome would likely drive risk-off flows into safe-haven assets, pressure Treasury markets and yields, and lift energy prices, increasing volatility and downside risk for risk assets.