Vincent Deluard: Inflationary pressures mirror the late 90s, the gig economy’s tax impact is significant, and stocks may thrive amid fiscal stimulus

Key Takeaways

• Inflationary pressures may resemble those of the late 1990s and early 2000s.
• The US economy is experiencing rapid growth, potentially leading to significant fiscal stimulus.
• Tax collections are a reliable economic indicator, surpassing traditional labor market surveys.
• The gig economy is a growing contributor to tax revenue, with a substantial impact on economic metrics.
• Political incentives could drive increased fiscal spending as midterms approach.
• Inflationary acceleration could make stocks attractive in the near term.
• A secular bear market may emerge in the late 2020s due to political shifts.
• Institutions shape leaders more than leaders shape institutions.
• Quantitative easing has not led to inflation as previously predicted.
• The US lacks the industrial base to sustain its global order due to deindustrialization.
• Investors should diversify internationally rather than focusing solely on domestic stocks.
• Gold is favored over other commodities for long-term investment strategies.

Guest intro

Vincent Deluard is Director of Global Macro Strategy at StoneX. He previously served as Europe Strategist for Ned Davis Research Group and won the 2013 Euromoney Padraic Fallon Editorial Prize for his analysis of European debt crisis investment opportunities. He advises institutional investors on asset allocation, risk management, and global macro trends.

Inflationary trends and economic growth

• We could see an inflationary acceleration reminiscent of the late 1990s and early 2000s.

  — Vincent Deluard

• Deluard observes three bubbles: a stock market bubble, a pessimism bubble, and a nominal growth bubble.

• There will be an initial growth reacceleration in early 2026, potentially leading to a second inflationary wave.

  — Vincent Deluard

• Tax collections are seen as a more reliable indicator of economic health than labor market surveys.

• The US economy is growing rapidly, which could lead to significant fiscal stimulus in 2026.

  — Vincent Deluard

• Windfall gains from tax refunds are likely to stimulate consumer spending.

• Tax collections serve as a powerful indicator of economic activity because they reflect withheld income taxes.

  — Vincent Deluard

• The increase in tax collections in January is a strong indicator of economic activity.

The gig economy and tax revenue

• The gig economy is a significant and growing part of American capitalism, contributing nearly a trillion dollars in tax collection.

  — Vincent Deluard

• The underlying tax base from the gig economy is expected to grow by 10% a year.
• The US economy is showing signs of strength that contradict pessimistic views.

• There may be additional fiscal stimulus leading up to the 2026 midterms.

  — Vincent Deluard

• Immediate economic impacts from upcoming tax refunds and fiscal measures are anticipated.

• The Supreme Court should avoid getting deeply involved in tariff battles.

  — Vincent Deluard

• Political incentives will drive significant spending as midterms approach.

Stock market dynamics and inflation

• We could see an inflationary acceleration that makes me quite bullish for stocks in the near term.

  — Vincent Deluard

• Current market conditions remind Deluard of late 1999 and early 2000, with rising volatility.

• We may face a secular bear market in the late 2020s and early 2030s due to political shifts.

  — Vincent Deluard

• Institutions shape leaders more than leaders shape institutions.

• Quantitative easing has not been inflationary despite predictions to the contrary.

  — Vincent Deluard

• Kevin Walsh may not be as hawkish as the market expects.

• The window for rate cuts may be passing as we speak.

  — Vincent Deluard

Technological advancements and economic implications

• A productivity boom could necessitate significant rate cuts.
• Deluard expresses skepticism about AI’s impact on productivity.
• Capex estimates from major companies are significantly increasing, indicating a positive economic impact.
• Nominal incomes are growing, indicating potential economic acceleration.

• The economy may be accelerating and could potentially overheat.

  — Vincent Deluard

• Data center construction is energy-intensive and contributes to inflation.
• A good macro analyst must hold contradictory thoughts simultaneously to navigate complex realities.

Global economic shifts and power dynamics

• We are on the brink of a technological revolution that will lead to significant societal changes.

  — Vincent Deluard

• There are three bubbles currently affecting the economy: a stock market bubble, a pessimism bubble, and a nominal growth bubble.
• Rapid technological change and a sense of unraveling contribute to societal nervousness.
• The current economic situation reflects a pattern of falling confidence across various demographics.

• The ‘beautiful deleveraging’ concept suggests managing nominal growth while suppressing the cost of capital through financial repression.

  — Vincent Deluard

• The value of a stock is influenced by the difference between the cost of equity and growth rates.
• The US may see a return to higher tax rates and stronger antitrust enforcement in the next electoral cycle.

Investment strategies and market risks

• The US lacks the industrial base to maintain its global order due to deindustrialization.

  — Vincent Deluard

• The future of power sharing among global powers remains uncertain.
• Investors should consider allocating more to international assets rather than being excessively overweight in domestic stocks.

• The US economy is expected to experience a ‘run at hot mentality’ until around 2026, which should support equity performance.

  — Vincent Deluard

• The biggest risk to any portfolio is its own exposure to a limited number of stocks.
• There is a growing trend of international investors looking to the US as a source of risk.
• Bringing capital back to Europe and Japan could create upward pressure on their currencies.

Commodities and alternative assets

• Gold is preferred over other commodities for long-term investment.

  — Vincent Deluard

• The current economic reacceleration is reflected in the price action of cyclical commodities and precious metals.
• A global settlement on monetary policy may occur in the mid-2030s.

• Crypto and precious metals are imperfect substitutes in the current monetary system.

  — Vincent Deluard

• The current economic climate supports a larger allocation to commodities like gold, silver, and platinum.

• The price action in cyclical commodities and precious metals validates the current economic reacceleration.

  — Vincent Deluard