Asks if current market broadening to small caps/Russell 2000 represents a catalytic moment for broader investment beyond the Magnificent 7/AI hyperscalers.
Host
Priya Misra
Acknowledges broad investment but highlights high valuations make diversification sensible as AI winners are uncertain.
Priya Misra
Advocates for fixed income in portfolios given equity valuations; bonds have returned 7% YTD and act as a hedge during equity wobbles.
Asks if her view is that the Fed will have to cut more due to overstated growth, rejecting curve steepening expectations.
Host
Priya Misra
Expresses concern about the labor market; a productivity boom from AI investment could lead to reduced hiring (jobless recovery).
Priya Misra
Sees Fed cutting rates. Presents two scenarios: gradual cuts if inflation nears 2%, or more aggressive cuts if labor market weakens non-linearly (pre-recession signal).