- 05 August 2026
PIMCO’s analysis of TIC data reveals continued foreign demand for US assets, but with significant differences...
As war exposed global dependencies, self-reliance could come at a cost
- INSTITUTIONAL INVESTORS
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- 25.06.26
- The Iran conflict may accelerate efforts to establish domestic production or more reliable supplies lines for energy, fertilizer and other materials.
- Nations are boosting defence spending as long-standing alliances are proving unreliable.
- Spending to accelerate self-reliance in energy, materials and defence may result in lower growth and higher inflation over the longer term.
The war in Iran illustrated that the foundation of the global economy engineered over the past few decades — built on broad global trade, global supply lines and low costs — is shifting. It reinforced lessons learned over the past decade, including from the Russian invasion of Ukraine, that geopolitical shocks quickly expose chokepoints that can impact global supply chains.
While investors likely already acknowledge this shift, they may not fully appreciate the resulting potential for lower growth and higher inflation. Investors can adjust by staying nimble across asset classes and geographies as global events unfold. Further, longer term shifts toward sectors that contribute to self-reliance and resiliency — such as infrastructure, defence and renewables — may prove fruitful.
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