I had an amazing time chatting with
on Substack Live, and I'm excited to share the video and transcript of our conversation. We had a terrific debate on where the US 10-year treasury yield is headed, and what that means for our broader economy. Arnold, ever the razor-sharp analyst, defended his view that interest rates are likely to climb, while I argued that declining government spending, and a potential productivity boost from AI will drive rates downward.We kicked things off by laying out our simple wager: with the 10-year yield at 4.18%, the bet was if rates fall by year’s end, I win, if they rise, Arnold takes the cake. The loser of the bet buys lunch. From there we dug into the mechanics. I highlighted that I see disinflationary forces, driven by both fiscal restraint and AI-enabled gains, would undercut inflation and, by extension, real interest rates.
Our conversation wasn’t just about numbers, though. We ventured into the realm of IT’s long-overlooked impact on productivity—a trend that I believe kept rates low in the 2010s and may well accelerate with AI. We also touched on the messy reality of government spending in Washington, the limits of conventional wisdom from the commentary class, and even some cultural observations from the halls of Davos. Arnold lives in the Beltway area and pointed to a very different vibe there than what I see in New York.
Our exchange was enlightening – a robust exploration of macroeconomic trends, the evolving role of tech in our lives, and the challenge of outsmarting the market. If you missed the live discussion, I highly recommend that you read the full transcript or watch the video. There’s a lot of nuanced insight in there that you won’t want to miss.
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