AI Capex, Market Froth, and Fed Outlook (with Tom Keene, Paul Sweeney)

The market has parallels to the late 1990s with real earnings backing AI infrastructure spending, but the key question is how much more hyperscalers will ratchet up capex. AI spend is propping up the economy and masking weaker household consumption. The risk of higher inflation and a hawkish Fed is lower given potential oil price relief. Opportunity exists in high-quality equities that have lagged.

Yields sideways , short term, interviewee implicit

implicit

NDX cautious up , short term, interviewee explicit

explicit

RUT

Oil down , short term, interviewee explicit

explicit

Metals

USD

NewEdge Wealth 6.0
Asset Manager $5.00B
Cameron Dawson 7.5

AI Capex, Market Froth, and Fed Outlook (with Tom Keene, Paul Sweeney)

ndx

There is precedent for markets to continue on rallying despite a hiking Fed.

6 calls

-3

no reliable edge (random outcomes)

3/27/2026 8:28:17 PM	short term down	7 days later	+5.40%	-5.40%
12/24/2025 5:18:35 PM	medium term cautious up	20 days later	-0.38%	-0.19%
11/3/2025 10:40:01 PM	short term up	6 days later	+0.69%	+0.69%
10/15/2025 10:43:07 PM	short term cautious up	5 days later	+1.91%	+0.95%
8/20/2025 7:15:16 PM	short term cautious down	5 days later	+1.65%	-0.83%

Show all 5 ndx results

wti

We're going to get relief in oil prices... we've seen a peak in headline inflation.

2 calls

+26

reliable positive edge across multiple calls

3/10/2026 3:23:17 PM	medium term cautious up	20 days later	+16.19%	+8.10%

yields

Dawson suggests the risk of higher interest rates and a hawkish Fed is lower, implying yields are likely to remain rangebound or slightly lower in the near term.

Tom Keene

Introduces the discussion on market froth, referencing SpaceX IPO and AI names.
Cameron Dawson

There are analogs of effervescence. Markets ignored rate hikes in 1999 up until March 2000. There is precedent for markets to continue rallying despite a hiking Fed.
Paul Sweeney

Asks if she is nervous about the market given all-time highs and frothy IPOs.
Cameron Dawson

In every boom there is real earnings and speculation. The 1990s had earnings growth too (Cisco, Intel had 100%+ earnings growth). The key difference is that today's hyperscalers have earnings, unlike the debt-driven low-quality companies of 2000. The question is how much more hyperscalers will ratchet up capex.
Paul Sweeney

Asks if AI spend is masking a weaker economy and earnings story.
Cameron Dawson

AI spend is certainly propping up the economy. Forecasts for household consumption have turned lower due to oil prices, inflation, and negative real wage growth, but forecasts for private fixed investment (AI capex) have moved higher within GDP.
Tom Keene

Reports that Qatar plans to rapidly restart LNG output after the Strait reopens, moving oil markets. Asks if this keeps the narrative going.
Cameron Dawson

Yes, it draws a picture of relief in oil prices, a peak in headline inflation, and lower risk of inflation metastasizing. This suggests pressure is taken off the Fed to hike rates. The risk of higher inflation, higher interest rates, and an adversarially hawkish Fed is lower.
Paul Sweeney

Asks what she expects from the Fed tomorrow.
Cameron Dawson

No policy action expected. The statement could change a lot. The SEP will be interesting—PCE forecast will move higher from 2.7%. The dot plot median will move higher by definition because Warsh's low dot will be removed.
Tom Keene

Reads a question from Dan Tanenbaum asking what to do with cash this morning.
Cameron Dawson

Given high inflation, the opportunity cost of cash is higher. There has been underperformance of high-quality equities, which is incredibly pronounced. There is opportunity to deploy into higher quality equities that have lagged in this very narrow market.

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markets at a glance