Allview: Market Risk Monitor

Key takeaways

• Markets reacted positively to Kevin Warsh’s January nomination as the next Fed chair
  His prior experience reassured investors, triggering a sharp pullback in precious metals and cryptocurrencies and briefly pausing the “debasement trade.”
• This shift in sentiment prompted several updates to our risk rankings
  We elevated the digital currency shakeout risk into the top five, lowered concerns about Fed independence to #7, reduced the bond‑vigilante risk to #8, and removed global recession risk from the list altogether.
• Heightened U.S.–Iran tensions returned to the top 10 risks
  A renewed risk of a prolonged conflict over Iran’s nuclear ambitions reentered the rankings at #10 due to the potential for materially higher global energy prices.
• Elevated U.S. mega-cap valuations remain our top risk to the market
  Valuations for mega-cap stocks continue to look stretched relative to the broader U.S. market, fueled by enthusiasm around AI-driven infrastructure expansion. Mid- and small-cap equities may be better positioned to outperform.