저자: MohamedEl-Erian · 외국인
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AI 설비투자 사이클이 아직 유효하며 약세 신호는 아직 본격화되지 않았다는 입장. 데이터센터 반대 움직임과 IPO 연기는 우려 신호지만 장기적으로 건설은 계속될 것으로 봄. 금리 상승은 AI 채권 발행 수요와 국채 수요 재편(중국·일본·걸프 등 구매 축소)이 원인이며, 추가 금리 인상은 주택·저소득층 등 금리민감 부문에 타격을 줄 수 있음. 향후 결과는 단일 시나리오가 아니라 변동성과 분산이 큰 환경이 될 것으로 전망.
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bull market. You say it remains intact despite shifting interest rate expectations. Why? And what are you looking for in terms of thwarting it? What thwarts it? I mean, at some point you you would need an environment where either the hyperscalers are pulling back. You would need some bad bond issuance in those markets.
You would need um earnings being revised lower disappointments. So, we're not seeing any of that. We also don't have a very overlevered economy. I don't think inflation's as big as a problem as other people say. The expectations in the bond market are very contained. So those are the types of things you would be watching for.
Look, at some point all cycles end and it'll end. This one, I don't think it's going to end with higher Fed funds rate necessarily anytime soon or higher oil prices. It's going to end when something breaks in the AI trade when you know again a a hyperscaler pulls back on investment or the market deems the amount of investment to be overdone compared to expected return on invested capital but that's not the current environment that we're in.
I do want to ask you, there was this whole tech IPO postponement that was announced today. That's a nuclear company and one of the reported reasons for postponing their IPO has been just the push back on data centers concern around the AI space. And I I wonder if that could be in the future a canary in the coal mine for other AI exposed offerings that are in the pipeline, whether it's SB Energy or OpenAI or Anthrope.
I mean, we've been watching them really closely, and here we have one that actually has taken a step and postponed its IPO as a result of all the noise. Well, we are in an election environment, so we're in a very politically driven environment and um our lawmakers and those running for office are very focused on this right now.
So, the actual environment is not perfect for that. We'll see where we are in 40 whatever days. Um is is the focus still there. Ultimately, I think that these data centers will be built. These data centers will be built with concessions to different communities or we'll find ways over time for them to be built more efficiently or with less water usage.
So ultimately this gets built. I think we're just in a moment right now. AI is having a a moment right now where there's concern, there's push back. There's a lot of not not in my backyard going on. Um but I don't think that's the the end of the story. Victoria, what do you think? I mean would this be a big market moment if we saw more of these postponements delays pulling alto together?
Well, when we look, Leslie, at kind of what's been driving this economy, it is all of this AI related information, right? It's the capex component coming from that. It's the data centers. We've seen that rotation in the market and those sectors kind of take the lead previously. So, if all of a sudden that's pulled away, I do think it gives the market a little bit of a pause.
I think it's going to be time for people to say, "Wait a minute, if we're not going to have that tailwind to the market, who is going to step up? What sector is going to step up and take the lead? If it's not going to be energy, if it's not going to be tech, and we're not going to have that capex, then I think you start wondering more about the pipeline that's coming with inflation, with higher prices, then maybe that's going to have something that's more of an effect on the economy when you don't have AI capex to buffer that.
Well, the question about that though is is that a tail risk or is that a base case? And given where we are right now in the hyperscalers's intention to spend over the next few years, the fact that the demand for artificial intelligence continues to grow, the models continue to get smarter and the cost of the models continue to decline.
You can see demand go up pretty significantly even from where we are right now, particularly as we contemplate a move towards more agentic AI. And so the question becomes does the supply capacity ever catch up to the demand. So when we think about data centers or we think about you know the political challenges around it is that a tail risk?
Yeah, sure. Is that the base case right now? No, I don't think that that's the base. But is it a base case that demand will continue at the pace that it's been going because you have the leaders of these AI companies coming out and saying we need to slow the pace of development. I don't know what that means for capex.
I don't think anybody does at this point in time because it depends on what the slowing down means for the end user. But has it become more than just a a tail risk given what we've seen over the last week or so? I don't think so. I mean, if you look at usage rates, so what percentage of businesses are deploying AI effectively?
You're still relatively low. Um, when you look at the, you know, there's 8 billion people on planet Earth. what percentage of them are using agents, you're still relatively low. So, demand for these things are likely to continue to accelerate. The models have gotten substantially better, substantially smarter.
So, um I I don't think we're putting that genie back in the bottle. And even if it were to slow here, we still have a pretty significant bill just to catch up with, you know, just the demand increase you could see from billions of people around the world moving to Agentic or agents working for them 24 hours a day, seven days a week.
But, you know, an interesting component of that is if it does slow down, what does that mean in terms of the debt issuance that we're seeing from them? Right? we've had this tremendous amount and there's a component of the higher yield story that it's coming from that that competition for capital. If that pulls back then I think you do have secondary effects in the bond market as well and perhaps you actually see yields come down a little bit.
So the the the the question on that so you look at the hyperscalers and you look at the capital expenditures that they've put forth and you compare it to the cash flow from operations they still look quite healthy right and so you know the question on that with regards what's going on in the bond market if if they're going to pull back if we're going to slow down here um look those stocks have been beat up to some extent on concerns about what capex could be um you know perhaps you you might even see a little lift there.
I mean, company like Apple that hasn't invested is actually trading at a higher multiple. So, I I I think it's a you know, look, it's a question of does this bull continue or is the cycle coming to an end? Um, I consider this you had mentioned crossurrens. I consider this another crossurren, but not not how this thing ends.
But, Victoria, you're watching it for what it means for the Treasury markets specifically and the potential crowding out dynamic that we may have seen as a result of all of the hyperscaler issuance. Maybe if that does slow down a little bit that could provide a a better case for for treasuries. Yeah, if you think that that's one of the reasons that's pushing Treasury yields up and I think it's a small component, but it is there for sure.
And it's when that's kind of when you saw everyone get really concerned when all that debt issuance started coming out and saying, wait, what's happening to free cash flow? What does this mean for these companies going forward? Obviously, they have huge balance sheets, but it does mean that there could be a risk going forward in terms of pulling back in that debt market.
And then the demand that we have seen there, where does that demand go in the bond market? Maybe it goes back to treasuries. I don't know. We'll see. But it could have an effect there, a secondary effect. Thank you so much, Brian. Victoria, really appreciate uh your perspective. Big inflection point uh that we're in right now.
So, it's helpful to get your your thoughts here. As the market does digest the Fed's rate decision, one big market voice says they should have done more. Here is what Double Lines Jeffrey Gunlock told Scott Wapner yesterday on Closing Bell. Actually would have dissented and voted to raise rates 50 basis points today.
Uh, and I would have called that stun and done and give the market a little bit more of a trueing up with the Fed funds rate. here with his reaction. Alon's chief economic adviser, Muhammad Alerian. Good to see you. Uh, do you agree with Gunlock? Should they have done 50? I do not. Um, if anything, had they been in control of the outcomes, which they hadn't because the market had boxed them into a corner with a 92% probability of a 25 basis point hike.
Had they been in control, I think the argument for hiking was really really balanced and I myself would have preferred that they don't hike. Um, do you think that the inflation picture is solved by 25 basis points or do you think that this was simply a credibility test trying to see if the Fed did remain independents and and what they would do in the face of a a Washington an administration that has pushed for lower rates.
So the signal certainly is that this is an independent central bank and the fact that the votes were 12 to zero reinforces that message. Um look for all the talk about credibility tests about inflation concern if you really look at the tenure and if you look at measures of inflation worries they haven't moved that much over the last few days.
They've been in quite a narrow range and the reason is what you discussed earlier. Neither the credibility of the Fed nor inflation worries were the factors behind the surge in yields. The surge in yields comes from an imbalance between increasing demand especially from the hyperscalers for bond financing and fewer reliable buyers and holders because of what's happening in China, in Japan, in the in the Gulf countries and in Norway,
right? The deglobalization extending to to treasury demand as well. Uh you recently wrote in the New York Times that powerful forces allow the US economy to bend without breaking and that supports the conventional wisdom for investors to be fully invested right now. But do you see anything on the horizon that could break that trend?
So I I see three different characterization of the economy. One is a consensus. It's incredibly robust. um it will mean revert all the time and therefore stay fully invested and buy every dip and that has worked well. The second one is saying wait a minute that equilibrium is getting more unstable. We're running down oil inventories.
We're running down the balance sheets of the consumer. Be careful. And then there's a third element which is the transformational transition that you just talked about in AI in particular but also in JO economics. So the bottom line is that we have to get used to living in the in between and that's our reality for a while.
There is no dominant scenario and investors should expect a much wider range of possible outcomes. Does that mean you expect more volatility? I do. I expect more volatility and more dispersion because what we are seeing is structural uncertainty. So yes, more volatility, more dispersion. Given all of this and and what you heard from Chair Worsh yesterday, do you feel like financial conditions are tightening?
I know he said that, you know, he was basically removing some accommodation in the 25 basis point hike, but h how would you assess the the financial conditions right now? Talk to anybody in housing and they'll tell you that not only are the financial conditions tightening, but they're already tight.
And Chair Walsh has pointed out that there are certain places where financial conditions are tight and there are other places and he points to the markets where financial conditions are loose and that's the issue for monetary policy. It's a very blunt instrument and the worry I have is that if the Fed validates what the market now expects in terms of further hikes at least three by mid year next year that that would be really bad news for the economy.
Why? What would what do you think would be the the outcome of of that? We would weaken the interest rate sensitive sectors odos housing. It would undermine the low-income consumer and all that without really re relieving any of the stress on the longer end of the curve because AI demand for bond issuance is inelastic.
It's being driven by a historic capex cycle and that's not going to be sensitive to the Fed's interest rates. So, we've got to be careful not to use an overly blunt instrument. There are other ways of doing it. The most important would be for example either going after the choke points that are created the higher oil prices and lowering the deficit to make room for this historic hypers scaling hyperscalers issues
right none of which is a a monetary policy solve of course Muhammad thank you so much appreciate thank you let's send it over to Christina parts Nebulous.
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