Important points
- Inflationary pressures may resemble those of the late 1990s and early 2000s.
- The U.S. economy is experiencing rapid growth, which could lead to significant fiscal stimulus.
- Tax collections are a more reliable economic indicator than traditional labor market surveys.
- The gig economy is contributing increasingly to tax revenues and has a significant impact on economic indicators.
- Politically motivated increases in fiscal spending may occur as midterm elections approach.
- Accelerating inflation could make stocks attractive in the short term.
- Political changes could lead to a secular bear market in the second half of the 2020s.
- Organizations shape leaders more than leaders shape organizations.
- Quantitative easing has not led to as much inflation as previously expected.
- Due to the hollowing out of industry, the United States lacks the industrial base to maintain world order.
- Investors should diversify internationally instead of focusing only on domestic stocks.
- For long-term investment strategies, gold is preferred over other instruments.
Guest introduction
Vincent Deluard is the Global Macro Strategy Director at StoneX. Previously, he was European Strategist at Ned Davis Research Group and won the 2013 Euromoney Padraig Fallon Editorial Award for his analysis of the investment opportunities of the European debt crisis. He advises institutional investors on asset allocation, risk management, and global macro trends.
Inflation trends and economic growth
We may see an acceleration in inflation reminiscent of the late 1990s and early 2000s.
— Vincent Dellard
- Dellard observes three types of bubbles: stock market bubbles, pessimism bubbles, and nominal growth bubbles.
Initial growth may accelerate again in early 2026, leading to a second wave of inflation.
— Vincent Dellard
- Tax collection is considered a more reliable indicator of economic health than labor market surveys.
The US economy is growing rapidly, and a large fiscal stimulus package is likely in 2026.
— Vincent Dellard
- Windfall profits from tax refunds are likely to stimulate consumer spending.
Tax collections reflect income taxes withheld and therefore serve as a strong indicator of economic activity.
— Vincent Dellard
- Increased tax collections in January are a strong indicator of economic activity.
gig economy and tax revenue
The gig economy is an important and growing part of American capitalism, contributing nearly $1 trillion to tax collections.
— Vincent Dellard
- Underlying tax sources from the gig economy are expected to increase by 10% annually.
- Despite the pessimism, the US economy is showing signs of strength.
Additional fiscal stimulus is likely in the lead-up to the 2026 midterm elections.
— Vincent Dellard
- Future tax refunds and fiscal measures are expected to have an immediate economic impact.
The Supreme Court should avoid getting too involved in tariff battles.
— Vincent Dellard
- As the midterm elections approach, political incentives will likely lead to significant spending increases.
Stock market trends and inflation
We are quite bullish on stocks in the short term as inflation could accelerate.
— Vincent Dellard
- Current market conditions remind Deluard of late 1999 and early 2000, when volatility was high.
Due to political changes, we could face a secular bear market from the late 2020s to the early 2030s.
— Vincent Dellard
- Organizations shape leaders more than leaders shape organizations.
Despite predictions to the contrary, quantitative easing did not cause inflation.
— Vincent Dellard
- Kevin Walsh may not be as hawkish as the market expects.
The time for rate cuts may be passing as we speak.
— Vincent Dellard
Technological advances and economic impact
- A sharp rise in productivity could necessitate significant interest rate cuts.
- Deluard is skeptical about AI’s impact on productivity.
- Estimates of capital expenditures for major companies have increased significantly, indicating a positive effect on the economy.
- Nominal incomes are increasing, indicating potential for economic acceleration.
The economy is accelerating and could overheat.
— Vincent Dellard
- Building data centers consumes a lot of energy and contributes to inflation.
- Good macroanalysts must hold contradictory ideas simultaneously in order to navigate complex realities.
Changes in the world economy and power trends
We are now on the brink of a technological revolution that will bring major changes to society.
— Vincent Dellard
- There are three bubbles currently affecting the economy. The stock market bubble, the pessimism bubble, and the nominal growth bubble.
- Rapid technological change and a sense of unraveling increase social tensions.
- The current economic situation reflects a pattern of declining confidence among various demographics.
The concept of “beautiful deleveraging” suggests managing nominal growth while containing the cost of capital through financial repression.
— Vincent Dellard
- The value of a stock is affected by the difference between the cost of capital and the growth rate.
- The U.S. could return to higher tax rates and tougher antitrust enforcement in the next election cycle.
Investment strategies and market risks
Due to the hollowing out of industry, the United States lacks the industrial base to maintain world order.
— Vincent Dellard
- The future of power-sharing among world powers remains uncertain.
- Rather than being excessively overweight in domestic stocks, investors should consider increasing their allocation to overseas assets.
The U.S. economy is expected to experience “runaway heat” until around 2026, which should support stock performance.
— Vincent Dellard
- The greatest risk to a portfolio is its own exposure to a limited number of stocks.
- There is a growing tendency for foreign investors to focus on the United States as a source of risk.
- Capital returning to Europe and Japan could put upward pressure on currencies.
Commodities and alternative assets
For long-term investments, gold is preferred over other instruments.
— Vincent Dellard
- The current economic re-acceleration is reflected in the price trends of cyclical products and precious metals.
- A global settlement on monetary policy could occur in the mid-2030s.
Virtual currencies and precious metals are imperfect substitutes in the current monetary system.
— Vincent Dellard
- Current economic conditions are encouraging increased allocation to commodities such as gold, silver, and platinum.
Cyclical commodity and precious metal price trends support the current re-acceleration of the economy.
— Vincent Dellard
