{"id":172198,"date":"2026-06-22T15:05:23","date_gmt":"2026-06-22T15:05:23","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/172198\/"},"modified":"2026-06-22T15:05:23","modified_gmt":"2026-06-22T15:05:23","slug":"fed-hawkishness-and-stretched-valuations-offset-iran-deal-relief-deutsche-bank-says","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/172198\/","title":{"rendered":"Fed hawkishness and stretched valuations offset Iran deal relief, Deutsche Bank says"},"content":{"rendered":"<p>    <img fetchpriority=\"high\" decoding=\"async\" src=\"https:\/\/www.europesays.com\/iran\/wp-content\/uploads\/2026\/06\/a6d9de2932cf5d40f4903bc4864e564e.jpeg\" alt=\"Fed hawkishness and stretched valuations offset Iran deal relief, Deutsche Bank says\" loading=\"eager\" height=\"556\" width=\"960\" class=\"yf-lglytj  loaded\"\/> Fed hawkishness and stretched valuations offset Iran deal relief, Deutsche Bank says Proactive uses images sourced from Shutterstock      <\/p>\n<p class=\"yf-1fy9kyt\">Despite the interim US-Iran deal and a considerable fall in oil prices, risk assets have barely moved, with the S&amp;P 500 still beneath its record high from early June and credit spreads widening.<\/p>\n<p class=\"yf-1fy9kyt\">The puzzle reflects four competing forces, Deutsche Bank analyst Henry Allen argues.<\/p>\n<p class=\"yf-1fy9kyt\">First, the Federal Reserve&#8217;s hawkish pivot last week has pushed up real yields, counteracting the initial relief from the geopolitical breakthrough.<\/p>\n<p class=\"yf-1fy9kyt\">The US 10-year real yield closed at 2.22% on Wednesday after the Fed decision, its highest in over a year, whilst Germany&#8217;s equivalent hit a five-month high of 0.89%.<\/p>\n<p class=\"yf-1fy9kyt\">Second, markets had already priced in a temporary resolution to the conflict through oil futures curves, limiting the upside potential once a deal was actually reached.<\/p>\n<p class=\"yf-1fy9kyt\">Third, risk assets staged a historically powerful rally over April and May, with the S&amp;P 500 gaining 16% in two months, a move not seen since World War II except in post-recession bouncebacks or just before the 1987 Black Monday crash.<\/p>\n<p class=\"yf-1fy9kyt\">The CAPE valuation ratio has now reached its highest level since 2000, the dot-com bubble era.<\/p>\n<p class=\"yf-1fy9kyt\">Fourth, structural supply constraints remain unresolved despite the interim agreement. Tanker traffic through the Strait of Hormuz, which carried 20\u201325% of global oil before the conflict, remains a fraction of pre-crisis levels. Brent crude is still around 30% above its January level despite the deal.<\/p>\n<p class=\"yf-1fy9kyt\">Deutsche Bank tempers concerns about near-term weakness, noting that stronger-than-expected growth and resilient labour market data underpin the Fed&#8217;s hawkish repricing.<\/p>\n<p class=\"yf-1fy9kyt\">If Fed rate moves reflect upside growth surprises rather than deteriorating fundamentals, markets can weather the shift. Moreover, circuit breakers prevent the mechanical crash dynamics that defined 1987, and the year-to-date S&amp;P 500 gain of 10% is far shallower than the 39% seen before Black Monday<\/p>\n","protected":false},"excerpt":{"rendered":"Fed hawkishness and stretched valuations offset Iran deal relief, Deutsche Bank says Proactive uses images sourced from Shutterstock&hellip;\n","protected":false},"author":2,"featured_media":172199,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3],"tags":[3273,47068,53072,53073,34,9060,20514],"class_list":["post-172198","post","type-post","status-publish","format-standard","has-post-thumbnail","category-iran","tag-deutsche-bank","tag-fed","tag-fed-rate","tag-initial-relief","tag-iran","tag-iran-deal","tag-the-federal-reserve"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116794381337600020","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/172198","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=172198"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/172198\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/172199"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=172198"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=172198"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=172198"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}