Bitunix Analyst: The US-Iran agreement and the sharp drop in oil prices are just the beginning; risk assets are entering the ultimate test of the "real high-interest-rate era."

BlockBeats News, June 17 — The core narrative in global markets is gradually shifting from “the end of the Middle East war” to “the asset revaluation in the post-war era.” As details of the US-Iran memorandum of understanding continue to be revealed, including the lifting of oil export restrictions, the unfreezing of frozen assets, and plans for private investment funds as high as $300 billion, the market has begun trading in advance the possibility that Iran will re-enter global energy and capital markets. However, the actual pace of the Strait of Hormuz’s recovery remains uncertain. European allies have adopted a cautious stance on mine-clearing and escort operations, and shipping companies generally believe that full restoration to normal passage may still take weeks, or even longer—showing that although geopolitical risk has declined, it has not disappeared entirely.

Energy markets have been the first to reflect this shift. With the United States potentially allowing Iran to immediately resume oil exports, about 68 million barrels of Iranian crude stranded at sea are waiting to re-enter the market. Coupled with the potential expiration of Russian oil exemptions, the global energy supply landscape is being reshaped. In the short term, increased Iranian output can help lower oil prices and transportation costs, but if Russian exports become restricted again, the energy market may still face new supply-and-demand tug-of-war in the future. This is also why gold demand has not noticeably cooled despite expectations of peace. A survey by the World Gold Council shows that more and more central banks continue to increase their gold reserves, which in essence reflects that central banks in various countries’ long-term defensive demand against geopolitical and global debt risks has not changed.

Meanwhile, there is a clear divergence in global central bank policy. The Bank of Japan has raised interest rates to 1%, the highest level in 31 years, yet it has simultaneously announced that it will stop further reductions in bond purchase sizes next year. Australia’s central bank, after consecutive rate hikes, paused rate increases for the first time. This indicates that central banks have begun entering a new phase: “maintaining high interest rates for longer, but avoiding a rapid contraction in liquidity.” The focus that the market truly cares about is centered on the first FOMC meeting tonight, at which the new Fed Chair, Warsh (Kevin Warsh), will take the stage. Regardless of whether it is castle securities, academic surveys, or market pricing, recent data all show that market expectations are shifting gradually from rate cuts to the risk of rate hikes re-emerging. In other words, for the past two years the market has been trading the timing of rate cuts; now it is beginning to price in the possibility that funding costs may rise again.

Of note is that even as expectations for high interest rates warm up, risk assets continue to attract capital. SpaceX not only completed its $60 billion acquisition of Anysphere, but at one point even surpassed Microsoft and Amazon to become the world’s fourth-largest company by market value. AI, space technology, and large-scale technology capital expenditures are still accelerating expansion. However, this has also made the market start to worry about the risk of an imbalance between valuations and liquidity. When credit markets still maintain extremely low interest-rate spreads and technology companies can finance at very low costs, the constraining effect of high interest rates on risk assets has not yet truly manifested.

For the crypto market, the biggest variable right now is no longer the Middle East, but whether Warsh will reduce forward-looking policy guidance and redefine future financial conditions. If the Fed only maintains high interest rates while allowing credit to continue expanding, market liquidity may still support the performance of risk assets. But if in the future the Fed manages the supply of funds by tightening credit while also shrinking the balance sheet, then technology stocks, AI-related concepts, and the crypto market may all face valuation re-pricing pressure. Therefore, what the market is seemingly trading at the moment is a “peace dividend,” but in reality it is waiting for the Fed to decide the direction of the next round of global liquidity—and its performance will continue to reflect the market’s true assessment of funding costs and the liquidity outlook.