Shortages & Beyond: Top Goldman Strategist Continues To 'Advocate For Meaningful Hedges Of Downside Tails'

Following the Iran ceasefire, global markets have experienced a sharp relief rally, compressing risk premia and driving strong gains across equities, high-carry currencies, and EM assets. Renewed optimism around AI supply chain shortages has propelled tech exposures to new highs, even as oil prices and yields remain elevated.

Yet, as top Goldman Sachs strategist, Dominic Wilson, writes in his latest note (available here in full for Pro Subs), the outlook remains delicately balanced: while deep downside tails from conflict have receded, re-escalation risks in the Middle East persist, and macro optimism already appears well-priced.

1. The risks of relief.