Episode summary
The Fed Put Is Dead: Why Stagflation & a Bear Market Are Next | Vincent Deluard
Monetary Matters
· · Hosts: Max · Guests: Vincent Deluard
Summary
Vincent Deluard argues that the U.S. equity market is already weakening beneath the index level, with roughly two-thirds of U.S. stocks below their 200-day moving average and consumer names in deep drawdowns. He thinks the market is too sanguine on earnings, growth, and the Fed’s room to keep tightening, and says that if the choice is stocks or long-term Treasuries over the next six months, Treasuries win on liquidity rather than valuation.
His case for Treasuries is tactical and calendar-driven: year-end rebalancing, pension demand, possible Treasury bill/coupon shifts, debt-ceiling constraints, and a likely drain on issuance could all support duration. Over a longer horizon, he expects sticky inflation, wages that eventually catch up to energy shocks, and a secular backdrop that could leave long yields higher even if returns are merely mediocre rather than disastrous.
On stocks, Deluard says growth has been flattered by AI capex and temporary fiscal support that is fading after the midterms. He also thinks the Fed will be forced into a bad tradeoff between softening growth and persistent inflation, while geopolitical shocks could still upset the bond rally. Internationally, he sees France in a fiscal spiral and argues the euro’s long-run solution would be a weaker currency or deeper European integration.
Key takeaways
- Deluard says about two-thirds of U.S. stocks are below the 200-day moving average, which he reads as evidence of a broad bear market already underway.
- He expects long-term Treasuries to outperform equities over the next six months because liquidity and year-end demand could overwhelm weak valuation appeal.
- Deluard thinks inflation will stay sticky because wages tend to catch up after energy shocks, even if headline measures temporarily cool.
- He argues that much of the recent U.S. earnings strength came from temporary fiscal support and AI-related capex that may fade after the midterms.
- Deluard says France’s fiscal position is deteriorating in a self-reinforcing loop, and that the euro ultimately needs either depreciation or deeper integration to survive.
Notable quotes
“probably twothird of US stocks are trading below the 200 day moving average”
“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”
“the Fed is going to be in the nightmare scenario of uh having uh bad economic data and at the same time high inflation”
“I would not uh jump to the conclusion that it's different this time that uh workers do not have any power and that this this increase in energy costs will not pass through to wages”
“for the first time since ' 08 we're going to enter a period without either a Fed put or a fiscal put”
How the episode opens
Probably twothird of US stocks are trading below the 200 day moving average. If you look at the consumer names, you are seeing just complete massacre. The Fed is going to be in a nightmare scenario of bad economic data and at the same time high inflation.
It's going to be a blame game where Trump's going to point out, look, when I had my majority, the stock market was alltime high. Now you voted for all these crazy socialists and the market is taking it dumb. Too bad for you.
Conversely, for the Democrats, I'm gonna call that the Trump economy. And yeah, period of stagation would not be bad for the Democrats. This episode is brought to you by Sarma Partners, who manages a return to tangibles ETF, Lens, ticker Lens, the Sarma thematic ETF built for a return to Tangibles.
Learn more at surmiaetf.com and see the show notes for disclosures. Let's get into it. Welcome to Other People's Money.
I am joined today by Vincent Deuard, director of global macro strategy at Stone X. Vincent, thanks for joining me today.
Pleasure to be here. — All right. Well, we have a lot to talk about. I want to jump into the big picture first. Have we entered the end of this equity bull market and started a bare market?
I would think so. I mean, most stocks would suggest that. I mean, if you look at uh you know, probably twothird of US stocks are trading below the 200 day moving average.
uh if you look at the the consumer names I mean you are seeing just complete massacre um you know most names like your your Nike your Harley Davidson your lenard I mean McDonald's are down you know 50 60% plus which is very unusual uh for you know when you see the index at you know what 2% from the alltime high and the Fed begin of hiking cycle that's I I don't think actually we've ever seen so much damage on consumer names when the Fed that's been been hiking.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed put
- stagflation
- bear market
- treasuries rotation
- eurozone crisis
Companies and tickers mentioned
- SNEX
- StoneX
- Sarmaya Partners
Watch the episode
Watch “The Fed Put Is Dead: Why Stagflation & a Bear Market Are Next | Vincent Deluard” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Monetary Matters, this episode and its artwork belong to Jack Farley. Octagon is not affiliated with the show; this page is an independent summary.
