Oct 1, 2026 · 1h 7m
Rosenberg challenges inflation fears as bonds face real-rate pressure
MacroVoices #552 David Rosenberg: Navigating The Noise
The episode tests whether energy shocks, fiscal supply, AI investment, and political change can reshape inflation and bond-market expectations.
- 1Energy shocks may not sustain inflation without wage growth, while housing and Chinese competition add disinflationary pressure.
- 2Higher real yields, Treasury supply, corporate borrowing, and AI capital spending are keeping long-term bonds under pressure.
- 3Possible midterm gridlock could curb fiscal stimulus even as deteriorating breadth and crowded Nasdaq positioning expose hidden equity risk.
Don't miss
Rosenberg argues that possible post-midterm gridlock and the end of one-off fiscal stimulus could surprise bond bears by pushing yields lower.
The brief
David Rosenberg argues that energy prices alone are unlikely to create sustained inflation without wage growth, challenging the alarm surrounding current oil and refined-product markets.
The bond selloff looks driven more by rising real rates than inflation expectations, with AI capital spending, corporate borrowing, and Treasury supply adding pressure at the long end.
Rosenberg sees possible midterm gridlock as a neglected bond-market variable: the end of one-off fiscal stimulus could eventually support lower yields, despite today’s political contradictions.
China’s industrial capacity, open-source AI competition, and weak housing could reinforce global disinflation even while headline indices remain buoyed by mega-cap technology.
The trade desk finds a market split between resilient headline indices and deteriorating breadth, stronger positioning in Nasdaq longs, and pressure on bonds, gold, and oil.
What was said on this episode
38 statements · 9 positive · 25 negative · 4 neutral
Post-election gridlock usually slows growth, lowers inflation, and reduces bond yields.
“Historically, when a one-party power swings to a two-party system with gridlock, 80% of the time the economy slows, 80% of the time inflation goes down, and 80% of the time bond yields go down in that two-year period after a national election.”
Listen at 0:00
Inflation is not currently the major threat portrayed by media and Wall Street.
“In my opinion, it's not.”
Listen at 4:11
Core goods CPI inflation is below 0.7%, a four-year low.
“Today, it's running below 0.7%. It's at a four-year low.”
Listen at 5:12
Refined energy prices will remain elevated rather than rise continuously.
“I think that will just stay at an elevated level.”
Listen at 8:02
Sustained inflation requires price shocks to feed into wages.
“Prices have to feed into wages.”
Listen at 10:47
Current price shocks are not feeding into wages.
“we're not seeing it right now.”
Listen at 11:45
Current energy shocks will not become a major sustained inflation problem.
“I'll take the other side of the bet that this is going to be a major sustainable inflationary problem for the economy.”
Listen at 14:40
Hyperscalers are sharply increasing capital expenditure commitments.
“these hyperscalers dramatically increasing their CapEx commitments.”
Listen at 15:16
Three of the four largest hyperscalers have negative net free cash flow.
“three of the biggest of the four are now. net free cash flow negative.”
Listen at 15:23
Hyperscaler borrowing is competing with government borrowing for capital.
“So now you're having corporate credit demands bumping against government credit demands.”
Listen at 15:42
Reset Federal Reserve expectations explain most of the recent Treasury yield increase.
“The biggest change has been the reset of Fed expectations.”
Listen at 19:56
Kevin Warsh has sharply changed his policy stance since becoming Fed chair.
“Warsh has done a giant pivot.”
Listen at 20:57
Markets interpret Kevin Warsh’s communications as hawkish.
“the market is reading every syllable as hawkish.”
Listen at 22:41
Pandemic fiscal stimulus accounted for over half of the inflation increase to 9%.
“that accounted for more than half the inflation we saw going from zero to 9%”
Listen at 24:51
The midterm elections will produce a period of fiscal gridlock.
“we're going to go into a period of gridlock.”
Listen at 25:44
Fiscal stimulus will end after the November 3 midterm elections.
“There's no more fiscal stimulus in the economy after November the 3rd.”
Listen at 26:47
Historically, post-midterm gridlock is followed by lower bond yields before the next election.
“80% of the time, bond yields go down in that two-year period between the time of the midterms where you get the gridlock to the next election.”
Listen at 27:11
Reducing long-dated Treasury issuance can influence the yield-curve shape.
“It's just influencing the shape of the curve by cutting back on long-dated issuance.”
Listen at 29:41
AI markets have few meaningful barriers to entry.
“there are no real barriers to entry.”
Listen at 37:45
China will exert downward pressure on global inflation through competition.
“China will once again, as it's done in the past, exert itself as a source of global disinflation.”
Listen at 37:51
Future AI productivity gains will reduce inflation.
“future productivity benefits, which will be disinflationary”
Listen at 38:09
The U.S. housing market is currently in recession.
“Housing is in a recession.”
Listen at 40:43
U.S. new-home prices have fallen 8.5% year over year.
“New home prices are down 8.5% over the past year.”
Listen at 41:05
The housing market has become a source of deflation.
“the housing market, which has emerged as a source of deflation”
Listen at 42:36
The average and median U.S. stock is 15% below its 52-week high.
“the average and median stock in the United States is down 15% from the 52-week highs.”
Listen at 43:24
Gold is currently in a corrective phase.
“I think that this is a, we're in a corrective phase.”
Listen at 45:46
Gold’s secular bull-market story is not over.
“But is the secular story over? No.”
Listen at 45:50
Global central banks continue reallocating reserves into gold.
“global central banks continue to diversify into gold.”
Listen at 47:02
Gold’s reserve-share mean-reversion trade remains incomplete.
“We haven't even undertaken the full mean reversion trade yet.”
Listen at 47:38
The ROSI ETF is expected to list on the NYSE in January or February.
“the timeframe should be sometime January, February of next year.”
Listen at 51:05
Buying near-term S&P 500 downside protection offers an attractive trade-off.
“carrying reasonably priced protection through the calendar looks like an attractive trade-off.”
Listen at 52:14
The median S&P 500 stock is 16% below its 52-week high.
“the median stock in the S&P 500 is 16% off of its 52-week highs.”
Listen at 56:25
Only 20% of S&P 500 stocks remain above their 50-day moving average.
“It just hit 20%, which basically means four out of five stocks in the S&P 500 have broken trend on the downside.”
Listen at 56:40
The euro could decline to 1.10 or 1.08 against the dollar.
“the euro could head down to 110 or even 108”
Listen at 1:00:17
Crude oil has retraced approximately half of its prior advance.
“we've now mean reverted, giving back half of those gains.”
Listen at 1:00:56
Gold is likely to retest the 4,000 price level.
“It will be very likely that we can even retest the 4,000 level”
Listen at 1:02:20
Gold will trade sideways and consolidate into the elections.
“I'm anticipating into the elections that gold will be far more range. inchbound and consolidate in the weeks to come.”
Listen at 1:03:24
Speculative positioning has shifted sharply toward long Nasdaq exposure.
“there has been a huge positioning pivot to the long side of the nasdaq”
Listen at 1:04:28
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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