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Interest Rates Outlook

The Domino Effect of the Iran War on Interest Rate Markets

Wednesday, 01 April 2026, written by Maarten Spek

Expectations of a swift end to the war in Iran may put further downward pressure on interest rates in the short term, but beneath the surface, structural forces are paving the way for a new phase of rising rates. What does this mean for central bank policy and US and European long-term interest rates?

This report is published: Bi-weekly

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Previous reports

Markets are pricing in too many ECB rate hikes

Wednesday, 18 March 2026

The war in the Middle East presents bond markets, central banks and investors with a new dilemma: is this a temporary energy shock, or the start of yet another period of persistent inflation?

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War in Iran increases inflation concerns

Wednesday, 04 March 2026

The war in Iran is driving up oil prices and uncertainty is elevated. However, the bond market is reacting differently than it did during previous geopolitical shocks. Why? And what does this mean for the interest rate policy of the Fed, ECB and Bank of England?

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The downside of AI leads to lower interest rates

Wednesday, 18 February 2026

Financial markets are already aggressively pricing in AI’s downsides for many companies; pushing interest rates even lower. Given the breakneck pace of AI development, this pressure is likely here to stay for a while. That’s why we’re adjusting a large part of our rate expectations for the coming months.

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Hedging Interest Rates Risks

Rising or falling interest rates can significantly impact your current and future financing costs.

Through our sister company, ICC Consultants, many ECR clients already benefit from independent hedging advice that combines clear strategy with hands‑on execution support.

Whether you face a hedge obligation under your financing arrangements, or simply want stable and predictable cash flows to protect profit margins from volatile interest rates, it’s worth having a conversation with us.

When should you reach out?

  • If you currently rely on your bank alone for hedging, an independent advisor ensures that pricing, strategy, and execution truly work in your best interest.
  • If you already work with an advisor, consider inviting us to provide a competitive quotation — our services are typically more cost‑effective.

With ICC’s interest rate specialists and real‑time pricing systems on your side, you gain full transparency, lower costs, and the confidence that nothing is overlooked and every decision is the best possible.

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