Jurrien Timmer discusses the market's dual narratives: the left tail of higher rates/inflation from oil supply bottlenecks and the right tail of the AI-driven earnings boom. He argues that a potential US-Iran peace deal could remove the left tail risk, keeping the 10-year yield below 4.5% and allowing the AI-led rally to continue. He notes that real rates, not inflation expectations, have driven the recent yield move, and warns that unanchored inflation expectations could push yields to 5% or beyond.
implicit
explicit
RUT
implicit
Metals
USD
Fidelity
7.8
Asset Manager $4500.00B
Jurrien Timmer 8.5
Asset Manager $4500.00B
Jurrien Timmer 8.5
5/27/2026 1:11:50 AM
ndx
If the left tail can be removed, meaning the 10-year doesn't break out above 4.5%, then I think that would kind of keep that right tail intact and we can continue to have a very good market.
| 2/19/2026 2:00:31 AM | short term cautious up | 5 days later | +1.27% | +0.63% |
| 11/21/2025 3:01:39 PM | short term down | 7 days later | +1.89% | -1.89% |
| 9/23/2025 2:19:26 AM | short term up | 5 days later | +0.44% | +0.44% |
rut
Timmer's overall constructive view on equities, supported by strong earnings and potential removal of the oil/inflation overhang, would benefit small caps (RUT) as well.
wti
Timmer notes that a peace deal would remove the left tail risk of higher inflation from oil supply bottlenecks. The JPMorgan team cited earlier also argues that with an offramp, oil prices are set to be lower in 6-12 months. This implies a cautious downward view on oil.
| 3/3/2026 2:24:23 PM | medium term cautious up | 20 days later | +23.69% | +11.85% |
yields
Timmer warns that if inflation expectations become unanchored, yields could easily reach 5% or beyond. He sees the 10-year at 4.5% as a key level, and a break above that would be bearish for equities. This implies a cautious upward bias on yields.
| 3/4/2026 8:22:38 AM | short term up | 5 days later | -0.24% | -0.24% |
