Fitch’s report is pretty honest—that temporary US-Iran understanding can’t withstand any turbulence. The risk ratings for 72 industry sub-sectors basically haven’t changed, showing that institutions are also sitting on the sidelines. The term “tail risk” just gives me a headache.

Fitch says that after the temporary understanding reached between the U.S. and Iran in June, the situation still contains risks such as retaliatory strikes, fragile agreements, and Israel's non-participation, putting pressure on global corporate credit. Although its negative scenario may not materialize, it can serve as a reference for conflict escalation. If the situation escalates again, U.S. and European growth will slow significantly. Fitch's risk ratings for 72 industry sub-sectors mostly remain unchanged, with a few being upgraded or downgraded. Tail risks in the Middle East persist, and further escalation will continue to suppress global financial markets and credit conditions.