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GDP growth, which then amounted to 4.8%. Long-term rates averaged 3.8%. Therefore, short-term rates depended on nominal growth. Long-term rates then depended more on deflation or the absence of inflation . So, the yield curve was inverted over 60% of the time by an average of about 100 basis points.
Therefore, we believe that we can see nominal GDP growth in the range of 6-8%. That's where we think short-term rates will go, with long-term rates at 5-7%. So, in terms of government bonds, we are already in the lower range. I don't know if you saw Jeff Lonsdale saying the other day that we're talking about $40 trillion in debt, that's such a daunting number that it seems like there's no way out.
He said not to worry, you know, everyone wants to raise taxes. Don't raise taxes. We will enter a disinflationary decade starting in 2030 thanks to AI. Growth will be so high that you won't even have to raise taxes, and everything will take care of itself. Did you see how he said that? Katie , do you agree?
I didn't see him say it, but I generally agree with the idea that we will overcome this through growth. I was at the very beginning of my career during the Reaganomics era, and the same discussions were going on then. And of course, growth solved the problem then, and I believe it will solve it again.
You know, it's interesting, I think many people will start competing for this growth rate. We're in the 7-8% range, and I've seen Elon Musk seem to be predicting over 20% real GDP growth. But I agree that the surprise here will be the speed of growth, and we are already seeing this in AI companies. They have amazing growth rates.
Then I think 4% for 30 days is pretty good. Yes, I think many investors think that's quite good. So, you're talking about something that could go well . Right now we see Brent at 106. We see WTI at 94. It seems like people see the potential that a lot of things could go wrong if oil prices stay this high.
Well, because it's already ended badly several times before . Every time we think we're on the verge of a deal, it doesn't happen. And so this should be a constant source of concern. Agreeing with Steve, I believe that the main theme of the market is betting. In fact, I believe that the Fed does not want to crash the market, because that would lead to a collapse of the economy.
And here's why . So many people use the wealth effect gained from investing in the market to invest in the real economy every day. I believe that the biggest threat to continued prosperity is a market collapse. But the beauty is that the companies that make up the backbone of the market, when we talk about the S&P 500, are very strong.
Many of them have undergone significant repricing as their earnings outpace the price increases we have seen. So, the multipliers have come down, and I think there's some margin of safety here. Therefore, I believe that the Fed has room to tighten policy without harming this segment of the market. However, other market segments will be much more sensitive to rates than these.
And the beauty is that they are much smaller components of the market. So we have a countervailing force that I think is very important to the bottom line : we have a lot of things to worry about , but earnings continue to rise in important sectors, allowing the Fed to gain control until the Middle East issues are resolved.
So how long does the market have to be in decline, you know, for it to affect the economy? We have seen many market declines. We saw declines of 10-20%, followed by V- shaped recoveries. I don't think so. Yes, I think there is a condition. I believe there is a condition now that is sustainable. Buying on a dip—I agree with you that it's pretty hard to break the market's backbone, but rest assured, we definitely don't want that to happen.
We don't want rates to start going down for bad reasons. And I can tell you for sure that this is not at all what the Fed wants in this case. You know, it seems like you're talking about a bunch of problems, but at the same time you're optimistic about the market. I want to discuss one thing with you.
Scott Kronert of Citi said I didn't say that. I did n't say I was optimistic. He said he no longer invests in the market. Yes, but you don't seem too concerned. Well, I have some concerns about the 10- year bond, but if I didn't have to worry about anything , I would put more money into the market. We touched on the fact that you mentioned a number of issues, but you don't seem too concerned.
You feel that there is an opportunity for movement forward that is at least positive . I want to discuss this with you, Wise, since you want to speak out. Citi, Scott Kroner and his team published this. Scott will appear on Closing Bell a little later. The title is "Near the Boiling Point." So I think that's a little more radical than your current position, right?
Near boiling point. Macroeconomic headwinds are mounting, growth remains resilient, earnings momentum is still positive, and the economy's sensitivity to higher rates appears lower than in past cycles, as I mentioned earlier, which leads us to favor equities over bonds, but we recognize that the balance of risks has become less favorable.
So , I don't think you're at the boiling point, right? You? No, not at boiling point . And keep in mind that when analysts and strategists publish something, they are trying to attract attention. And you don't get it, hey. Before we get to today's topic, if you want more in-depth stock analysis and exclusive information, consider joining our channel.
Members get access to premium stock analysis and additional market content. Now let's move on to Nvidia. When you compare Nvidia to some of the biggest tech companies in the world, one thing immediately stands out . The assessment does not quite match the growth . Nvidia trades at around a 14-15 multiple to earnings, while Apple is closer to 35.
Now look at the difference in growth. Nvidia is targeting approximately 17% annual growth. And this is not a company that struggles to find customers. . This created a truly unusual situation. You have huge growth, strong demand, and a company at the heart of the AI ecosystem. But there is another question that investors should ask.
How quickly does Nvidia hardware actually become obsolete ? For a long time, investors assumed that each new generation of GPUs makes the previous one irrelevant. A new architecture emerges and companies are being updated . Old equipment is depreciated, and the cycle begins again. But real-world usage shows something different.
Let's take the Nvidia A100. This architecture dates back to approximately 2020. Yet some of these systems are contracted to operate . Why? Because not every artificial intelligence task requires the latest graphics processors. You may need the latest Nvidia architecture to train advanced basic models, but for other tasks, you don't necessarily need the latest hardware.
Older GPUs can still perform inference, batch computing, physical AI, research, and enterprise tasks. become obsolete. It can simply move to another part of the AI ecosystem, extending its productive lifespan. And for cloud operators, this is extremely important. A GPU that continues to generate revenue years after deployment can be significantly more profitable than an asset that becomes useless after a short time.
Nvidia is currently moving into the next generation with better GPUs. The first early deployments are using NVL 72 configurations. But is this something investors sometimes overlook? The GPU in an AI data center is just one component. You also need racks, networks, power cooling, data center space, and software to manage the entire system.
All these parts have to work together. Otherwise, you won't have computing power ready to use. And that's why ir job is to turn expensive hardware into computing power that customers can actually use. And right now the demand is extraordinary. Some providers actually say that every GPU they can get is immediately distributed among many customers.
That's how tense this market has become. Of course, this won't last forever. The market will eventually respond to the shortage, and more chips will be produced . vailable. New cloud capacities are emerging, and eventually supply and demand converge. But the important question is not whether supply will catch up with demand. She will catch up. The real question is how long demand will outstrip supply.
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