Energy Shock and Rate Hikes Could Cause a 2022 Style Bear Market | Eric Wallerstein | Clocktower Group

Wallerstein sees Fed hikes into an oil-driven supply shock, plus fiscal drag, as setting up a 2022-style US bear market.

• Global rate moves track oil, not growth: Wallerstein says the 10-year yield chart globally overlays almost exactly with oil prices; with oil near $105 (vs $70 counterfactual), the 10-year would be near 4-4.5% instead of elevated hike-pricing scenarios; Canada's ~70% odds of hiking despite zero GDP growth since Q1 2024 shows the move is energy-driven, not a higher global neutral rate.
• 2022 setup forming: Wallerstein calls a 'garden variety bear market' his emerging base case for the US, citing the same three ingredients as 2022 — energy shock, stretched valuations, and synchronized global central bank tightening — plus a new 2026 fiscal drag as One Big Beautiful Bill effects fade and tariff refunds end.

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