Since the start of the Iran war in late February, US equities are up 9%, Bitcoin is down 1%, and gold is down 20% (see chart). While heavy AI spending has bolstered stocks, Bitcoin and gold have lagged partly due to expectations that the Fed might raise rates to head off inflation. We disagree with those expectations. Our base case is for the Fed to hold off on rate hikes. If we’re right, Bitcoin’s price may catch up with stocks. Since the start of the Iran war, 1-year Fed rate expectations have risen ~60bp and about half of Fed officials think it may be appropriate to hike rates in 2026.1 The European Central Bank ... (full story)