Oct 27, 2026 · 1h 8m
Deluard sees a bear market beneath resilient indexes
The Fed Put Is Dead: Why Stagflation & a Bear Market Are Next | Vincent Deluard | StoneX
The episode tests whether weakening breadth, sticky inflation, and fading policy support have ended the market regime investors relied on.
- 1Market breadth and collapsing consumer stocks suggest a bear market may be developing despite major indexes near their highs.
- 2Persistent inflation, credit deterioration, and oil-supply risks could leave the Federal Reserve unable to deliver expected rate cuts.
- 3Europe’s fiscal and political strains point toward a weaker euro reached through crisis rather than coordinated reform.
Don't miss
Deluard explains why a severe oil-supply shock could hurt stocks and bonds simultaneously, leaving energy exposure and volatility hedges among the few potential beneficiaries.
The brief
Vincent Deluard argues that a bear market may already be underway beneath resilient U.S. indexes, where weakening breadth and collapsing consumer stocks reveal deeper damage.
His central tension is stagflation: inflation remains entrenched while credit deteriorates, fiscal support fades, and the Federal Reserve has less room to cut rates.
Deluard warns that geopolitical conflict, damaged refining capacity, transport costs, and regional oil premiums could create an inflationary supply squeeze that hurts stocks and bonds together.
The conversation then turns to France and the Eurozone, where fiscal paralysis, high energy costs, and fragmented politics make a weaker euro more likely through crisis than coordination.
The standout call is tactical rather than triumphant: shift away from equities toward long-term Treasuries, while recognizing that an oil shock could challenge both sides of that trade.
What was said on this episode
47 statements · 10 positive · 29 negative · 5 mixed · 3 neutral
U.S. equities have entered a bear market.
“I would think so. I mean, most stocks would suggest that.”
Listen at 1:11
Long-term Treasuries should outperform stocks over six months.
“If the decision comes down to owning stocks or treasuries over the next six months, I don't think there's a question. It has to be long-term treasuries.”
Listen at 2:37
The Treasury will increase bill issuance and cut coupon issuance.
“I would expect Besson to do exactly what he said Yellen shouldn't be doing, which is increase bill and cut coupons, maybe announce something on the 20-year.”
Listen at 4:35
A debt-ceiling impasse would temporarily halt Treasury issuance.
“That means that we don't see any issuance.”
Listen at 6:00
Long-term Treasuries are likely attractive over six months.
“So for the next six months, yeah, long-term treasuries are probably a good place to be.”
Listen at 7:07
Inflation will remain structurally around 3.5–4%.
“we are in this kind of secular inflation and probably that 3.5 4 percent a range that we are at now will uh will prevail”
Listen at 7:43
Long-term Treasury yields could reach 6%–7%.
“We could very easily 6%, 7% on long-term yields.”
Listen at 8:09
The AI bubble is currently driving economic growth.
“Where is our growth coming from? It's the AI bubble.”
Listen at 9:02
Excluding hyperscaler CapEx, underlying economic growth is weak.
“If you take out the close to 2% of GDP that we see in hyperscale CapEx, you realize that that growth is really not that great outside of the CapEx bubble.”
Listen at 9:05
Tax-collection trends indicate a significant economic slowdown.
“it suggests that there is significant slowdown in the economy.”
Listen at 10:56
AI capital expenditure cannot continue doubling annually at its current GDP share.
“the AI capex is so big now that you start running into these base effect issues. Start accounting for 3% of GDP. It's kind of hard to double every year.”
Listen at 11:17
Tariff refunds, individual tax refunds, and accelerated depreciation will end after midterms.
“All these three factors are going to go away after the midterms.”
Listen at 13:52
Fiscal policies have subsidized corporate margins by over $300 billion.
“We have a bit more than $300 billion in, I would call that fiscal subsidy to corporate margins.”
Listen at 14:24
The Fed should hike once in December and then pause.
“doing one probably in December and then taking a pause would make a lot of sense.”
Listen at 17:32
Inflation will remain extraordinarily sticky and fail to decline.
“I do expect the inflation to be extraordinarily sticky and not coming down.”
Listen at 17:45
The Fed will lower growth forecasts and reinterpret inflation favorably.
“the fed would probably uh guide a bit lower revised on the the growth forecast uh and then find some sort of creative way to dismiss inflation”
Listen at 18:09
Real wages will catch up within twelve months after an oil shock.
“you see real wage catch up in the next 12 months.”
Listen at 22:19
Energy-cost increases will eventually pass through into wages.
“I would not jump to the conclusion that it's different this time, that workers do not have any power, and that this This increase in energy costs will not pass through to wages.”
Listen at 22:25
Atlanta Fed median wages are rising while average hourly earnings decline.
“you see that the Atlanta median wage is going up while the average hourly earnings is going down.”
Listen at 24:10
Oil prices could reach $200 per barrel.
“It's not out of the realm of possibility to see $200 oil.”
Listen at 26:11
A major oil disruption would raise both oil prices and Treasury yields.
“oil oil and yields uh would go up at the same time”
Listen at 27:27
Holding energy stocks and Treasuries together could hedge an oil shock.
“the way to hedge that is you know to be long energy stocks i think kind of a barber approach where your long energy stocks and your long treasuries at the same time would probably work well.”
Listen at 27:32
Macron’s presidency has been disastrous across relevant economic metrics.
“the Macron presidency has been disastrous.”
Listen at 31:29
France has a roughly 5.5% GDP deficit and negligible growth.
“the deficit is, you know, around five and a half percent of GDP. The growth is non-existent.”
Listen at 31:34
France’s apparent growth is essentially inflation rather than real expansion.
“the only growth that we have is just inflation, basically”
Listen at 31:52
French riots are increasing Marine Le Pen’s polling support.
“The far-right candidate, Marine Le Pen, is loving this. I mean, every day that the French are rioting, she gets an extra percentage point in the polling intentions.”
Listen at 34:35
German rearmament harms France but supports German growth.
“Germany rearming is a negative shock for France. It is positive for German growth.”
Listen at 36:51
Chinese exports are severely damaging European automobile, machinery, and chemical exports.
“our men exports, the pride of Germany, mostly cars, but also heavy machinery, chemical products are getting trounced by Chinese exports.”
Listen at 39:03
Currency depreciation is the easiest way for Europe to restore competitiveness.
“The easiest way is to trash the currency.”
Listen at 39:31
Germany’s high energy costs undermine its export competitiveness.
“when you have to pay three times as much on your energy as your neighbor, you're not competitive.”
Listen at 42:33
The euro’s design is causing a major crisis that may force integration.
“The euro is doing what it should do, which is cause a giant crisis.”
Listen at 45:13
France’s tax rates are high enough that further increases reduce tax revenue.
“France is probably on the wrong side of the Laffer curve where we tax so much that raising the tax rate actually diminishes the tax revenues.”
Listen at 48:07
Markets are pricing three ECB rate hikes, which Deluard considers unreasonable.
“we're on the same track as the fed three rate hikes now i think that's absolutely crazy”
Listen at 49:42
Lagarde’s successor is unlikely to match Draghi’s crisis leadership.
“I don't think we're going to see that with her successor”
Listen at 51:48
Governing Brazil is substantially harder than winning its election.
“winning the election is easy. The easy part, governing is the hard part.”
Listen at 55:05
Brazil’s Congress will constrain Lula’s ability to govern.
“Congress has gone the other way. So Lula's end are going to be very much tied.”
Listen at 55:16
Brazil’s energy profile is improving due to rising oil production.
“Brazil on the margin improves its energy. profile”
Listen at 57:25
The political left remains electorally viable globally.
“The other lesson that I would take is the left is not dead.”
Listen at 58:46
Brazil’s election may signal a global shift toward the left, confirmed by U.S. midterms.
“maybe the Brazilian election is the signal that the pendulum is moving the other way. And we'll see the confirmation at the midterms in the US.”
Listen at 59:36
The U.S. will enter a period without meaningful Federal Reserve or fiscal support.
“for the first time since 08 we're going to enter a period without either fed put or a fiscal put”
Listen at 1:00:27
Neither monetary nor fiscal backstops will be available over two years.
“In the next two years, I don't really see any of these puts.”
Listen at 1:01:07
Democrats will win both chambers, producing divided government.
“We'll have a divided house. I think Democrats win the House and the Senate.”
Listen at 1:01:30
Equities will be lower in six to twelve months.
“if you ask me in six, 12 months, I think equities are lower. Yes.”
Listen at 1:03:29
Europe will achieve currency adjustment through chaos and repeated crises.
“Europe is going to do. with chaos and repeated crisis.”
Listen at 1:04:00
A weaker euro against Asian currencies is the preferred trade.
“The solution really is weaker euros from Asian currency. So the way I've expressed that view is with a long yen and Korean won against the euro.”
Listen at 1:04:57
A weaker euro against Asian currencies is the appropriate solution.
“the solution really is weaker euros from Asian currency.”
Listen at 1:04:57
France may eventually leave the euro as part of its solution.
“it could be that that would be some sort of a, yes, walking out of the euro. That could be part of the solution for France.”
Listen at 1:07:27
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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