This Will End In A Deflationary Depression | Michael Pento

16 snips

Aug 4, 2026

Michael Pento, founder and CEO of Pento Portfolio Strategies and macro-focused money manager, discusses July’s market shocks and whether they signal a turning point. He outlines his multi-sector model and explains why he’s neutral now. Topics include bond yield drivers, oil and geopolitical impacts, the path toward disinflation or deflation, and portfolio tilts like dividends, gold, and hedges.

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INSIGHT

How Oil Moves Can Push US Yields Higher

Pento connects rising oil prices to FX flows: when oil spikes Japan sells yen to buy dollars then sells treasuries, which pushes US yields higher.
He argues this chain can amplify US yield spikes and burst asset bubbles.

INSIGHT

Forecast Of A Deflationary Depression

Michael Pento expects the current chaotic reflation cycle to end in disinflation, then deflation and a depression.
He repeatedly emphasizes this will be a depression (not just a recession) driven by bursting credit and asset bubbles.

ADVICE

How To Position During Whipsaw Markets

Pento is currently sitting in his model's sector three: a neutral, dividend-heavy equal-weight S&P stance with inflation and disinflation hedges.
He recommends staying neutral during whipsaw political shocks (e.g., Iran) until the cycle clarifies.

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July ended up being a painful month.It was the Nasdaq's worst July in 22 yearsBonds experienced their biggest July yield-spike since 2005And oil's saw its biggest July price increase in over 30 yearsWhat's driving all this?Is this just a mid-year pressure-release before prices resume climbing? Or are these signs that momentum is rolling over?Most importantly: what does all this mean for investors?What positioning makes sense in this environment?For answers, we're fortunate to welcome back money manager Michael Pento, founder & CEO of Pento Portflio strategies.

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