ab 18 November 2025 Global Research Global Economic Perspectives The economic impact of AI The economic impact of AI Researchers at the FRB of Kansas City estimate the adoption rate of generative artificial intelligence has been roughly double that of mass market exposure of the internet or personal computer (Bick, Blandin, Deming, 2024)(1) . In Filippucci, F. et al. (2025) from the OECD, the authors collected a range of estimates of the sustained impact of AI on productivity growth over 10 years. The range ...

The Bank of Canada said the country's anemic productivity growth is a “systemic” problem, doubling down on its message to governments and businesses to urgently address the issue. https://t.co/dSnnuGPclH ...

Market Performance & Outlook - The S&P 500 is up 36% from the April 8th lows and 16% year-to-date [2] - The economy is growing at 4% and productivity growth is running up 3% [2][3] - Earnings are growing 123%, revenues are growing 8%, both exceeding historical averages of 5% [4] - Fourth quarter growth is expected to be 8-12% cumulatively, suggesting a positive outlook [5] - The market has strong tailwinds, including accommodative global central banks and disinflationary trends [6] Technology Sector & AI - Technology is a key driver of the market, but investors are uncertain about the broadening out of the AI trade [8][12] - Mega-cap technology stocks experienced significant market cap fluctuations, adding $618 billion after losing $800 billion the previous week [10] - The market is differentiating between companies with explicable AI capex strategies and those with less clear paybacks [16] Investment Strategies & Considerations - Investors should consider whether they are overweight in technology and assess the potential for technology positions to be a source of liquidity in 2026 [9] - It's important to use stops and ride the best stocks in the market during the year-end meltup period [21] - There are opportunities beyond AI, with various stocks in uptrends and great technical setups, including commodities and energy stocks [19][20]

Economic Impact of AI - AI-powered productivity growth is unlikely to alleviate difficult government budget choices [1] - The expectation that AI will solve budget issues is considered wishful thinking [1]

Core Viewpoint - The dollar index is experiencing downward pressure due to dovish comments from the Federal Reserve and disappointing economic data, while the euro is gaining strength amid easing political risks in France and supportive comments from the European Central Bank. Group 1: Dollar Performance - The dollar index (DXY00) is down by -0.21% and has reached a one-week low, influenced by dovish remarks from Fed Governor Christopher Waller regarding potential interest rate cuts to support the labor market [1] - The October Philadelphia Fed business outlook survey fell significantly by -36.0 to a six-month low of -12.8, which was weaker than the expected 10.0, contributing to bearish sentiment for the dollar [3] - The ongoing US government shutdown is also seen as a negative factor for the dollar, as prolonged shutdowns could harm the US economy [3] Group 2: Economic Indicators - The October NAHB housing market index rose by +5 to a six-month high of 37, surpassing expectations of 33, indicating some positive momentum in the housing sector [3] - Richmond Fed President Tom Barkin noted that US productivity growth appears to be improving "significantly," which may help mitigate inflationary pressures from trade tariffs [4] Group 3: Euro Performance - The EUR/USD pair is up by +0.21% and has reached a one-week high, supported by easing political risks in France after Prime Minister Lecornu survived two no-confidence votes [5] - Hawkish comments from ECB Governing Council member Wunsch indicated that the likelihood of additional ECB rate cuts has been decreasing, further supporting the euro [5][6]

Productivity Growth - Australia's productivity growth cannot be restored to its long-term average of 1.6% per year by a single change [1] - The country requires numerous smaller shifts to improve productivity [1]

Group 1 - The stock market is reaching record highs, while the bond market anticipates a quicker return to neutral interest rates, with stable inflation expectations [2][4] - Productivity growth is a significant factor driving market optimism, with business capital expenditures (capex) increasing nearly 10% at an annual rate since January [4][3] - The AI boom is contributing positively to GDP growth, with strong spending on information processing equipment and software, outpacing consumer spending in the first half of the year [4][5] Group 2 - There is criticism of the Federal Reserve's growth estimates, which are perceived as overly pessimistic at around 1.8%, suggesting a disconnect with current productivity trends [6][7][22] - The potential for GDP growth to reach 4% is highlighted, with calls for the Fed to acknowledge and adjust their projections accordingly [9][10] - The Fed's internal divisions are noted, with differing opinions on interest rate cuts and overall economic outlook, indicating a lack of consensus among members [19][20][18] Group 3 - The housing market is showing signs of weakness, with a decline in housing permits and contracting construction employment, raising questions about the sustainability of GDP growth [14][15] - The market's reaction to Federal Reserve communications suggests uncertainty, with homebuilder stocks initially rallying but then selling off, reflecting mixed investor sentiment [16][17] - The ongoing debate about the Fed's independence and the influence of political appointments on its policies is emphasized, with suggestions for reforming the tenure of Fed governors to allow for more alignment with elected officials' policies [21][26][22]

Interest Rate Drivers - Global interest rates are primarily determined by the balance between saving and investment, not solely by central banks' inflation stabilization efforts [1] - Increased saving tends to push interest rates down, while increased investment pushes them up [1] - Structural forces have shaped interest rates over the past 50 years [1] Factors Influencing Interest Rates - Slowing productivity growth, due to diminishing returns from the ICT revolution, has exerted downward pressure on interest rates over the past 30 years [2] - Demographic shifts, specifically the baby boomers' transition from saving to drawing down on savings during retirement, impact interest rates [2][3] Potential Future Shifts - AI's transformative impact on work and technology could potentially drive interest rates upward in the future [3] - The baby boomers demographic shift could also contribute to rising interest rates [3] Market Focus - The market is closely watching a sell-off in long-dated bonds in developed countries [4] - An upcoming auction of 30-year government bonds in Japan is of particular interest [4]

Economic Principles - Productivity growth, driven by innovation and hard work, is the primary driver of rising living standards over time [1] - Credit's impact is more significant in the short term due to its ability to create economic swings, allowing consumption to exceed production temporarily [2] - Borrowing is essentially pulling spending forward, creating a future obligation to spend less than one earns to repay the debt, thus forming a cycle [5][6] Credit and Debt Dynamics - Credit differs from money; money settles transactions immediately, while credit creates an asset and a liability, representing a promise to pay in the future [7] - The total amount of credit in the United States is approximately $50 trillion, significantly exceeding the total amount of money, which is about $3 trillion [8] - Credit is beneficial when it finances productive investments that generate income to repay the debt, but detrimental when it funds overconsumption that cannot be sustained [10] Economic Cycles - Economic swings are primarily influenced by the availability of credit, not by fluctuations in innovation or hard work [4] - Borrowing sets in motion a predictable series of events, making understanding credit crucial for anticipating future economic outcomes [6] - An economy with credit experiences increased spending and faster income growth than productivity in the short run, but this is unsustainable in the long run [9] Example of Credit Amplification - An individual earning $100,000 annually can borrow $10,000, enabling them to spend $110,000, which in turn becomes another person's income [11][12]

Market Trends & Investment Strategy - JP Morgan Wealth Management 的投资策略主管认为，公司盈利的稳步增长是市场上涨的驱动力 [3] - 投资者已将注意力转向与人工智能或欧洲安全支出相关的有吸引力的微观故事，以及“一个伟大的法案”可能带来的潜在推动力 [3] - 尽管标普和纳斯达克指数均创下新高，但仍建议买入，并谨慎乐观地认为标普500指数可能升至7000点 [12][13] - 建议投资者以谨慎的方式进入市场，关注投资组合中的潜在漏洞，因为仍然存在各种风险，但跨资产类别和地区仍然存在机会 [14] Impact of Legislation & Corporate Benefits - AT&T 和 Verizon 等公司正在讨论他们将从“一个伟大的法案”中获得的收益以及他们计划如何使用这些资金 [4] - AT&T 预计将从该法案中获得 65 亿到 80 亿美元的收益，并计划在未来几年内将这笔资金投入到基础设施建设和加强养老金计划中 [4] - 一些消费行业的公司认为该法案可以抵消他们最初担心的关税带来的不利影响 [6] AI & Productivity - 企业对人工智能的采用率正在增长，是去年的两倍，并且以大约是 2024 年的 4.5 倍的速度增长 [7] - 美联储的一项研究表明，自 2019 年以来，人工智能采用率较高的行业享有更高的生产率增长 [8] - 正在使用多种衡量标准来评估人工智能带来的生产力增长，包括考虑特定公司的人员编制变化或保持不变的情况 [9] - 早期阶段人工智能对就业市场的扰乱表明，虽然某些技术领域的招聘可能放缓，但同时也创造了由技术支持的新工作岗位 [12]