Funds Face Growing Risks As Inflation Soars, Markets Tumble on Geopolitical Fears

• Fund managers have high exposure to stocks and credit, becoming increasingly risky • News of potential Iran attack on Israel shook markets, sending stocks down and oil prices up • Hotter than expected inflation pushed 10-year yields over 4.5%, boosting the dollar • Banks like Goldman and Barclays are cutting 2023 rate cut predictions as data stays hot • Tolerance for bad news is low with valuations high; geopolitical tensions add uncertainty