Rich Privorotsky, head of the Goldman Sachs Delta-one trading desk, noted in an August 17 report that when the S&P 500 is at historical highs and financial conditions are extremely loose, the market's constraint on policymakers significantly decreases, lowering the political cost of initiating geopolitical conflicts. He warned that the current market might be systematically underestimating geopolitical tail risks and pointed out that the cost of extreme tail-risk hedging tools is at historical lows, offering investors an opportunity to build protection at a low cost. Privorotsky also believes that pressure on long-end interest rates is the market's "only real sticking point," and the Federal Reserve might eventually be forced to resume interest rate hikes to restore credibility. In terms of overall strategy, he suggested maintaining a risk-on stance, holding the S&P 500 and gold, shorting bonds, and allocating to cheap volatility protection, favoring financials, semiconductor capital expenditure, industrials, and cyclical sectors.