Regime Change? The Cracks Beneath the Surface
Reflation is still here — but commodity leadership and rising volatility suggest the next phase may be stagflation.
Something is shifting.
Not dramatically. Not headline-worthy. But in the data.
We are still in reflation — expanding liquidity, firm commodity prices, resilient equity indexes.
But late reflation often transitions into something less comfortable: stagflation.
Stagflation is simple:
Slowing growth + rising inflation.
Demand cools. Margins compress. Growth decelerates.
But commodities remain firm. Inflation refuses to fully roll over.
And historically, that’s the environment that tends to show up before recession risk increases.
I’m not calling for a recession.
I’m saying I’m starting to see the ingredients.
Total Stock Market Leadership
Look at the leadership table. (Industry groups: not commodities)
Silver.
Copper.
Gold.
Oil & Gas Drilling.
Industrial metals.
Hard assets dominate.
That’s not random. That’s inflation pressure.
When commodity-linked industries sit at the top of relative strength rankings while other areas quietly fade, it tells you leadership is narrowing and rotating. That’s typically late-cycle behavior.
Futures Year-To-Date Performance
Now look at the YTD leaderboard.
