Macro Resilience Driven by AI Investment Amid Economic Slowdown

about 1 month ago

Parkev Tatevosian, CFA

"And that's why you've noticed that the stock market is increasing despite this data that I was showing you with an increase in unemployment and increase in unemployment claims, an increase in inflation. All of which points to bad news. But still, the US stock market has performed relatively well despite those developments. And it's because the offsetting factor is the hundreds of billions of dollars that's being invested in artificial intelligence which is boosting the potential for the US economy which is the rate at which it can increase without stoking inflation and that's been very positive. We haven't had an increase in the potential for US GDP since the 1990s I want to say when the internet was being built out and that created a big increase in the potential for the US economy and now we have another such technological advancement that increases the potential of the GDP of the US economy without stoking inflation."

The speaker explains that despite rising unemployment, inflation, and increased unemployment claims—factors that typically signal economic distress—the US stock market remains resilient due to significant investments in artificial intelligence. This investment is seen as boosting the economy's potential without exacerbating inflation, drawing a parallel to the transformative impact of the internet in the 1990s. The analysis suggests that this technological catalyst could support long-term economic growth, counterbalancing current negative indicators.