Iran conflict likely short-lived, markets seem positioned for resolution: Portfolio manager

• Manulife's base case is that the Iran conflict is relatively short-lived, with underlying global economic fundamentals remaining supportive.
• Traditional safe havens like US Treasuries and gold have not performed as expected during this geopolitical event, while energy prices and the US dollar have shown strength.
• The market is currently underpricing the potential for multiple interest rate cuts from the Federal Reserve in 2026 and 2027, as the Fed is likely to prioritize growth and jobs over inflation.

Nathan Thooft from Manulife Investment Management believes the Iran conflict will be relatively short-lived, leading to de-escalation and continued support from underlying economic fundamentals. He notes market complacency regarding geopolitical risks but attributes it to an expectation of a positive outcome. Thooft also suggests that markets are currently underpricing the likelihood of interest rate cuts by the Federal Reserve in 2026 and 2027.