{"id":89462,"date":"2026-06-22T05:45:39","date_gmt":"2026-06-22T05:45:39","guid":{"rendered":"https:\/\/www.europesays.com\/ch\/89462\/"},"modified":"2026-06-22T05:45:39","modified_gmt":"2026-06-22T05:45:39","slug":"oil-flows-ai-frenzy-and-fed-signals-david-roche-flags-fragile-balance-in-global-markets-post-us-iran-peace-deal-et-now-exclusive-markets","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ch\/89462\/","title":{"rendered":"Oil flows, AI frenzy and Fed signals: David Roche flags fragile balance in global markets post US-Iran peace deal | ET NOW EXCLUSIVE – Markets"},"content":{"rendered":"

\"Google<\/a>\"AI\"<\/p>\n

Roche explained that the recent rise in inflation linked to oil may prove temporary. (Image: ET NOW)<\/p>\n

Global markets may appear resilient on the surface, but the underlying drivers, from oil flows and geopolitics to the AI investment surge, suggest a far more complex and fragile setup, according to David Roche, President of Quantum Strategy.<\/p>\n

Roche said investors have largely brushed aside recent signals from the US Federal Reserve, even as the central bank struck a more hawkish tone than expected. \u201cThe Fed\u2026 has turned out to be more hawkish than people imagined and not submitting to the wishes of Donald Trump,\u201d he said, adding that policymakers remain committed to their inflation mandate. As a result, \u201cinterest rates\u2026 will not be cut, at least not at the moment,\u201d which in turn has helped stabilise inflation expectations.<\/p>\n

How did the Dow Jones react to the US-Iran deal?What impact did the Iran conflict have on oil prices recently?How are tech stocks performing amid geopolitical tensions?\"icon\"\/Created with AI. Errors are possible<\/p>\n

He noted that this stance is shaping the bond market, with \u201clong rates coming down while the short rates are not,\u201d reflecting confidence that inflation risks are contained. Roche argued that this credibility is crucial for market sentiment: \u201cIt gives confidence in the dollar and that people have to have confidence in the dollar before they go and buy AI with their dollars.\u201d<\/p>\n

Read Full Article<\/p>\n

While equity markets are being lifted by enthusiasm around artificial intelligence, Roche warned that the scale of investment in the sector could create distortions over time. In his view, \u201cAI is\u2026 a bubble,\u201d not because of its utility but because \u201cthe amount of money being poured into it is not rational and will not be remunerated by profits.\u201d<\/p>\n

He pointed to the scale of capital being deployed, saying \u201cwe have over a trillion dollars being dedicated to IT\u201d and even larger sums tied to infrastructure such as data centres and energy supply. Comparing this to global peers, he observed that \u201cChina has built an almost comparable and competitive AI system with approximately 10 per cent of the investment.\u201d<\/p>\n

Roche cautioned that the risks lie not in the technology itself but in the economics behind it. \u201cIt is a great product\u2026 but I don\u2019t pay for it,\u201d he said, adding that the inability to generate adequate returns could lead to \u201cthe bursting of the bubble,\u201d driven by \u201cunremunerated capital\u201d and misallocated investment.<\/p>\n

Iran<\/a> Deal Drives Oil Supply<\/p>\n

On geopolitics, Roche said the market\u2019s focus has been squarely on oil flows rather than the strategic implications of the emerging US-Iran understanding. \u201cThe only thing that Iran matters to markets about is that the oil is flowing,\u201d he said.<\/p>\n

He highlighted a sharp increase in supply moving through critical routes, noting that \u201csomething like 17 million barrels of oil is exiting the Red Sea and the Straits of Hormuz<\/a>,\u201d compared with about 7 million barrels before the agreement was announced. This surge in supply has been welcomed by traders, as \u201cthe oil prices are going to come down,\u201d helping to ease inflationary pressures and reduce the need for policy tightening.Roche explained that the recent rise in inflation linked to oil may prove temporary. \u201cThe reason for the oil prices to go up has now been removed. There will be more oil and lower prices,\u201d he said. Combined with central bank<\/a> vigilance, this reduces the risk of inflation becoming entrenched. \u201cThe Fed<\/a> made it quite clear that they were going to fight any inflation\u2026 so it does not become a spiral,\u201d he added.<\/p>\n

Strategic Risks Beneath the Surface<\/p>\n

Despite the market\u2019s positive reaction, Roche was critical of the broader implications of the deal. He described the agreement as \u201ca bad, bad, bad deal,\u201d arguing that it strengthens Iran\u2019s strategic position in the region. According to him, it \u201cputs Iran in charge of the Gulf\u201d and allows it to re-enter global financial flows.<\/p>\n

He also pointed to the return of dollar liquidity to Iran, saying the agreement enables \u201cthe dollar flow of being able to trade oil immediately\u201d and the \u201crepatriation of their assets.\u201d Political dynamics, he suggested, are also driving the agreement. \u201cTrump needs this deal because he needs lower oil prices,\u201d Roche said, while Iran \u201cneeds the dollars.\u201d<\/p>\n

This alignment of interests may ensure the deal holds in the near term. \u201cThe reason the deal will hold is because the two parties\u2026 have a common interest,\u201d he said, though he warned it leaves longer-term geopolitical tensions unresolved.<\/p>\n

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers\/audience to consult their financial advisors before making any money related decisions.)<\/p>\n","protected":false},"excerpt":{"rendered":"Roche explained that the recent rise in inflation linked to oil may prove temporary. (Image: ET NOW) Global…\n","protected":false},"author":2,"featured_media":89463,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[124],"tags":[2252,6972,45280,34142,18,25307,21681,45279,25306,134,1424,7142],"class_list":["post-89462","post","type-post","status-publish","format-standard","has-post-thumbnail","category-roche","tag-ai","tag-ai-bubble","tag-ai-today","tag-david-roche","tag-donald-trump","tag-et-now","tag-fed","tag-market-rally","tag-markets-news","tag-roche","tag-stock-market","tag-strait-of-hormuz"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/116792179274851920","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/89462","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=89462"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/89462\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/89463"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=89462"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=89462"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=89462"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}