Jurrien Timmer, head of global macroeconomics at Fidelity Investments, characterizes the current market environment as “another wild ride,” where each week seems to generate stranger headlines than the last.
However, despite the volatility, his overall message is that conditions are not as dire as they might seem, and he remains relatively constructive on the markets’ outlook.
Timmer maintains that markets, broadly speaking, are “pricing in some form of resolution” to current geopolitical tensions, particularly around Iran, “sooner rather than later,” he told CoinDesk in an interview.
Oil ‘retreat’
While crude oil prices rose above $100 a barrel, the futures curve remains in retreat, with the furthest contracts trading roughly $40 lower than the previous month. According to Timmer, that structure indicates that markets view the current supply disruption as a short-term bottleneck rather than a prolonged crisis.
Elsewhere, market behavior reinforces this cautiously optimistic view. The S&P 500, which at one point was down around 9%, has recovered to a drop of around 1%.
Credit spreads remain contained, suggesting that systemic tensions are limited. Even in traditionally defensive assets, the signals are nuanced. Gold and bonds, which are typically less correlated, have been moving more closely together, a dynamic Timmer attributes in part to global capital flows.
Countries that face limitations in moving energy through the Strait of Hormuz, he notes, may be increasing their liquidity by selling highly liquid assets such as gold and US Treasuries, creating unusual correlations.
The cryptocurrency market got a much-needed boost on Tuesday after US President Donald Trump announced a two-week ceasefire with Iran. Oil prices plummeted more than 17% on the news and stock markets also rose. Since then, WTI has recovered and is trading around $100.
Bitcoin’s $65,000 Support
bitcoin adds another layer to this changing landscape, behaving more like gold, while gold has, at times, been traded with characteristics more like BTC.
When bitcoin hit $126,000 last October, fast-moving capital shifted from cryptocurrencies to gold, a shift visible in exchange-traded fund (ETF) flows. Now, however, with bitcoin already down 50-60% from its peak, Timmer sees fewer “paper hands” left in the market.
The selling pressure has largely been absorbed, while gold, after a strong run, appears more vulnerable to a pullback. Despite this, he remains bullish on both assets. Bitcoin, in particular, looks technically interesting, with the $65,000 level acting as solid support.
He sees potential for a base to form, although he emphasizes that a catalyst will be needed to drive the next leg up.
The world’s largest cryptocurrency was trading in the low $70,000s at the time of this publication.
‘Price of success’
Timmer believes the stock is effectively priced for success, with single-digit declines despite significant geopolitical uncertainty. A key reason, he maintains, is the strength of corporate profits.
Importantly, Timmer notes that the broader context before the conflict with Iran was already constructive. The reduction of tariffs by the US Supreme Court had improved the political environment and fears of an AI-driven market bubble had not materialized. In fact, he sees investor skepticism, particularly toward AI and software valuations, as a healthy sign. In a true bubble, investors stop asking difficult questions; Today they are doing the opposite. That scrutiny, in his view, has helped prevent the market from overshooting.
Still, the situation in the Middle East remains unstable and the range of possible outcomes is wide. The worst-case scenario, in which Iran escalates its attacks by attacking energy infrastructure across the Gulf, could be highly destabilizing. Given that about 20% of the world’s oil supply passes through the Strait of Hormuz, a prolonged disruption could trigger a stagflationary shock, combining high inflation with weaker growth.
However, Timmer believes that markets have developed a more measured response to geopolitical shocks. After a series of “false alarms,” including last year’s tariff-related sell-off, in which the S&P 500 fell 21% from its highs, investors are less prone to panic. There is now a “show me” attitude, where weak hands are less easy to let go.
This context remains constructive, Timmer maintains, supported by what he describes as a strong mid-cycle economic expansion. However, it highlights several risks that investors should actively manage.
One is concentration risk, particularly in the so-called “Magnificent Seven” technology stocks. Interest rate risk is another key concern. The 10-year Treasury yield is near 4.5% and could move toward 5%, a development that has occurred even amid geopolitical uncertainty. Rising, rather than falling, yields are an important signal for investors to monitor closely.
The real risk
Ultimately, Timmer frames periods of volatility not just as challenges but as opportunities. It encourages investors to act as liquidity providers rather than recipients. Those who panic during turbulent periods become price takers, while disciplined investors with long-term perspectives can step in as price makers. At Fidelity, he notes, this means turning to volatility, providing liquidity and rebalancing portfolios when others are retreating.
While acknowledging that geopolitical events are inherently unpredictable, Timmer emphasizes that staying on the sidelines out of fear is not a viable strategy. Instead, a well-diversified portfolio, combined with a willingness to participate during stressful periods, may offer the best path forward.
Read more: Oil crisis and risk of war with Iran keep cryptocurrency investors on the sidelines: Grayscale
