As Iran targets oil infrastructure with missiles, Wall Street is still buying the dip — but DoubleLine's Jeffrey Sherman says this time, the trade that's worked every time may finally be broken.

EPISODE SUMMARY

With oil prices surging, rate-cut expectations evaporating, and a conflict now entering its fourth week, host Pierre Daillie sits down with Jeffrey Sherman, Deputy CIO of DoubleLine Capital, to interrogate the assumptions underlying today's risk portfolios. Sherman maps the transmission channels from Middle East conflict to Main Street purchasing power, dissects what the bond market is — and isn't — signalling about fiscal sustainability, and raises uncomfortable questions about the liquidity architecture of private credit vehicles that investors may not have asked themselves yet. The conversation spans the K-shaped labour market, the rotation into international and emerging market assets, and where Sherman sees the most defensible risk-adjusted opportunities in fixed income right now — without pretending the answers are simple.

3 KEY TAKEAWAYS

• The Iran conflict is structurally different from a tariff shock — war policy does not reverse on equity market pressure, making the "buy-every-dip" playbook potentially dangerous for the first time in years.

• Semi-liquid private credit vehicles carry a hidden contagion risk: when investors can't redeem, they sell public assets instead — a dynamic Sherman calls "the margin vortex" — and that forced selling can spiral back to reprice the illiquid positions that started the problem.

• In this environment, Sherman favours short-duration high-quality credit, agency and non-agency mortgages, and emerging market local currency bonds as the preferred expression of the de-dollarisation and commodity tailwind trade.

TIMESTAMPED CHAPTERS

00:00 - Opening — overweight US risk and what to do about it

01:30 - Introduction: recording amid active conflict, March 20, 2026

03:15 - War as an inflationary event — oil, distillates, and the infrastructure damage timeline

06:00 - Higher oil for longer: the "transitory" shock that stays at the new price level

08:00 - Growth curtailment, the deficit, and what the bond market is actually pricing

11:25 - Why this is not a TACO trade — the limits of policy reversal in wartime

13:50 - K-shaped economy: labour market confusion, the no-fire/no-hire dynamic, and wage data

19:35 - Three regressive shocks hitting lower-income households: inflation, tariffs, oil

20:10 - Credit spreads: IG, high yield, and the triple-C divergence

23:30 - International equities, the commodity rotation, gold, and EM local currency bonds

30:15 - DoubleLine's portfolio positioning and the case for diversification right now

34:20 - Private credit: the slow motion train wreck, gating mechanisms, and the margin vortex

45:40 - The liquidity mismatch problem — why "semi-liquid" is a contradiction in terms

49:05 - Specific fixed income opportunities: mortgages, CLOs, IG, and leveraged loan avoidance

52:45 - Practical playbook for advisors: portfolio tilts, hedges, and what to explicitly avoid

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