AI Is Propping Up the Economy. The Fed Could Break It.

Sarna argues AI capex is propping up a weak economy, and Fed overtightening risks recession while old stock-bond diversification no longer protects portfolios.

• AI masking weakness: Sarna says the broader economy is 'lukewarm' while only the AI economy runs hot; Meta's AI capex alone exceeds every country's defense budget except the US.
• Overtightening risk: The Fed hiking further could tip the lukewarm non-AI economy into recession, and Sarna sees a slowing economy as the only realistic path to get the 10-year yield back near Treasury Secretary Bessent's 3% target.

Themes, sentiment and reasons are AI-written paraphrases, checked so they never quote an episode. They may contain errors. Not investment advice. Episodes remain the property of their creators.