Apollo's Chief Economist Torsten Slok Talks AI and US Economy

Torsten Slok argues AI's initial phase is inflationary due to heavy capex in semiconductors, energy, and data centers. He sees strong tailwinds from AI and fiscal policy, leading to robust job growth and upward pressure on inflation. This combination makes rate cuts unlikely and raises the risk of a rate hiking cycle, with rates staying higher for longer.

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Apollo Global Management 9.0
Asset Manager $671.00B
Torsten Slok 9.5

Apollo's Chief Economist Torsten Slok Talks AI and US Economy | Bloomberg Talks

ndx

AI boom is a strong tailwind for growth, but initial phase is inflationary and token economics are uncertain, suggesting a cautious positive outlook for tech-heavy NDX.

rut

business formation is exploding higher... will ultimately also result in a lot more job growth

2 calls

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no reliable edge (random outcomes)

yields

rates are going to stay higher for longer

18 calls

no reliable edge (random outcomes)

6/1/2026 7:02:14 PM	medium term up	20 days later	+1.21%	+1.21%
5/5/2026 6:12:22 PM	short term cautious up	5 days later	+1.24%	+0.62%
4/3/2026 7:31:50 PM	medium term up	21 days later	+0.02%	+0.02%
3/27/2026 8:49:47 PM	medium term up	21 days later	-2.12%	-2.12%
3/27/2026 7:30:29 PM	medium term up	21 days later	-2.12%	-2.12%
3/6/2026 4:48:14 PM	short term sharp up	5 days later	+3.68%	+5.52%
12/23/2025 11:03:06 PM	long term up	61 days later	-2.59%	-2.59%
10/28/2025 5:15:14 PM	medium term cautious up	20 days later	+1.60%	+0.80%
10/13/2025 6:26:53 PM	medium term cautious up	20 days later	+2.09%	+1.04%
10/9/2025 2:13:08 AM	medium term sharp up	20 days later	+1.04%	+1.56%
8/29/2025 2:18:36 PM	short term sharp down	6 days later	-5.40%	+8.10%
8/15/2025 11:30:11 PM	medium term cautious down	21 days later	-6.80%	+3.40%

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Introduces the topic: Nvidia's Jensen Huang and Torsten Slok agree AI job loss fears are overblown; non-farm payrolls may be higher than expected.

Lisa
Torsten Slok

At the macro level, it's become much easier to open a business; business creation is exploding higher, leading to more jobs, not just displacement.

Census surveys show weekly business creation exploding; Stripe data shows solo founder numbers also exploding.
Asks about the message to white-collar workers fearing a 'washout'.

Lisa
Torsten Slok

Despite predictions of layoffs, ADP data shows 30-40k jobs per week for 8 weeks, jobless claims are low, ISM is above 50 and rising. Strong tailwinds from AI spending and fiscal policy make the economy 'on fire' with strong growth and upward inflation pressure.

If AI results in more job growth, it will be a 'miracle drug' creating both high productivity and job growth.
Points out that job growth is in construction, manufacturing, healthcare, education, not finance or media. Asks how to square white-collar decline with overall job growth.

Marie
Torsten Slok

Unemployment rate for 20-24 year olds has gone down in the last 6 months, showing young people can find jobs, though maybe not the jobs they expected.
Brings up discussion about plumbing as a lucrative alternative to white-collar work; asks if this is the future of job creation.

Marie
Torsten Slok

Criticizes the idea that fired white-collar workers will just give up; they will likely start businesses using their connections and new tools like LLMs and agents, which is why business formation is rising.

This business formation will ultimately result in more job growth.
Asks if younger generations are choosing not to enter the workforce due to unmet expectations.

Marie
Torsten Slok

Young people can find jobs, but maybe not the ones they expected, suggesting a mismatch in expectations.
Asks if the Federal Reserve has been undergoing a 'stress test'.

Lisa
Torsten Slok

Comments on Fed leadership transition, noting the outgoing chair is giving the new chair a chance to run with policy.
Mentions Kevin Warsh's hope for disinflation from AI, asks for Torsten's view.

Lisa
Torsten Slok

The initial phase of the AI boom will be inflationary due to rising semiconductor, energy, labor (data center contracting), and equipment prices, plus tariff lag effects.

We should expect the AI data center buildout to be inflationary, not disinflationary, in the initial phase.
Asks if CEOs will have second thoughts about replacing labor with AI when they realize the actual cost.

Lisa
Torsten Slok

Token demand and usage are not the same as productivity; businesses are figuring out if the cost of tokens is worth it relative to labor. The endpoint may require more labor, not less.

It's a transition; we need to figure out if we will be much more productive and if we will need more labor in the aggregate.
Points to the inflationary backdrop and a potentially hot labor report; asks what the Fed's response will be given no appetite to raise rates.

Marie
Torsten Slok

Markets are starting to price in a possible hike; hiking cycles never come alone (3-4 hikes or more). The risk is that rates stay higher for longer.

If there is a rate hike cycle due to low unemployment and upward inflation pressure, rates will stay higher for longer.
Summarizes the picture of inflationary AI buildout and labor market expansion; asks for Torsten's base case going into 2027.

Lisa
Torsten Slok

With 3% inflation and a very strong labor market, there is a higher likelihood of a stronger economy. AI boom and fiscal policy are not sensitive to interest rates, unlike housing and autos, so they will continue to support GDP.

The AI boom and the 'one big beautiful bill' will continue regardless of the Fed funds rate.

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