Episode summary
Testing the AI Trade; US-Iran Peace Talks Continue | Bloomberg Surveillance
Bloomberg Surveillance
· · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr · Guests: Torsten Slok, Lindsay Newman, Julia Coronado, Rebecca Homkes
Summary
The episode centered on two big macro themes: whether the U.S. AI and capital-spending boom can keep powering growth, and whether Iran peace talks can avert a broader geopolitical shock. Torsten Sløk argued the U.S. now has three growth tailwinds — AI, the new fiscal bill, and an industrial renaissance — and said nominal GDP could run near 5% over the next 12 months, with real growth around 2% to 2.5%. He also warned that AI spending is initially inflationary and that headline and core inflation could stay above 3% for the next year, making Fed rate cuts difficult.
The discussion on Iran was more cautious. Lindsay Newman said the negotiations still suffer from deep mistrust, with no clear progress on the nuclear file, the Strait of Hormuz, or other outstanding issues. She said the administration wants markets to believe a deal is close, but she was not optimistic that a resolution is imminent.
Julia Coronado and Rebecca Homkes then framed the U.S. economy as stable but narrow: labor supply is being held down by aging and weaker immigration, while AI investment and health care are doing much of the heavy lifting. Both said AI adoption is still shallow, with companies mostly dabbling rather than redesigning workflows, so the productivity payoff is likely to come later than the market expects.
Key takeaways
- Torsten Sløk said U.S. nominal GDP could grow about 5% over the next 12 months, driven by AI, fiscal policy and an industrial rebound.
- Sløk warned AI spending is inflationary first, and said headline and core inflation may stay above 3% for the next year.
- Lindsay Newman said Iran talks remain stuck on mistrust and unresolved issues, making a quick deal unlikely.
- Julia Coronado said the labor market is stable but low-growth, with a break-even payroll rate near zero to 50,000 because labor supply is constrained.
- Rebecca Homkes said most firms are still only dabbling with AI, and real productivity gains will require workflow redesign and governance.
- Homkes argued the near-term productivity impact of AI is being overestimated, even if longer-term gains are likely.
Notable quotes
“GDP over the next 12 months should be growing in nominal terms at roughly around 5% and in real terms we should have GDP growth at roughly two 2 and a half%”
“initially it is something that is not just driven by the one big bill of a bill, but it's also important driven by ultimately how long time you think the AI boom will continue”
“the inflation levels both for headline and for core inflation is going to be above three at least for the next 12 months”
“we have there has been so much speculation and back and forth about what's going on with the conflict in Iran”
“the majority of companies are still dabbling. So while AI adoption is very high it is incredibly shallow”
How the episode opens
Bloomberg Audio Studios podcasts radio news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m. Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube.
Tristan Slack is bulletproof economics. He does it with a continental Europe feel out of Copenhagen and of course his work at Princeton as well. Uh iconic and definitive I should say at Deutsche Bank and now at Apollo Global uh management.
Torstston, give us an update on real and nominal GDP in the United States of America. It's become a blur with a cacophony of the news. 12 months forward, where are you on real GDP?
Where are you on a nominal statistic? Well, the US is having three very important tailwinds to growth at the moment. One coming from the AI boom, another coming from the one big bill of bill and another tailwind also coming from the industrial renaissance, meaning the political interest in bringing back production to the US of manufacturing capacity.
And we're beginning to see all these three engines really fire very very significantly because the AI boom obviously is very strong. We also have the one big bill for bill especially for the next two three quarters is very strong and we're also seeing ISM manufacturing begin to accelerate in the last 6 months because now the trade war uncertainty is more behind us and now we're beginning to see the positive effects. So therefore GDP over the next 12 months should be growing in nominal terms at roughly around 5% and in real terms we should have GDP growth at roughly two 2 and a half%.
Is it just a set of stimuli?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai trade
- us-iran peace talks
- market outlook
- macro economy
- geopolitical risk
Companies and tickers mentioned
- APO
- Apollo Global Management
- Chatham House
- London Business School
- Macropolicy Perspectives
Watch the episode
Watch “Testing the AI Trade; US-Iran Peace Talks Continue | Bloomberg Surveillance” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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