Episode
David Rosenberg and Rich Bernstein on What Ends the AI Trade — And What They Own Instead
- Podcast
- Excess Returns
- Published
- Aug 8, 2026
- Duration seconds
- 3812
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Summary
Richard Bernstein and David Rosenberg reunite to debate the Federal Reserve, inflation, the AI investment boom, market bubbles, gold and the case for international diversification. The former Merrill Lynch colleagues examine whether the Fed should raise rates, how AI CapEx is reshaping the U.S. economy, why credit markets may lead the AI trade, what is driving gold, and where investors may find opportunities outside the mega-cap U.S. market. Topics covered Why the Taylor Rule points toward higher rates and why Rosenberg thinks the Fed should not hike What slowing GDP growth, productivity and labor costs suggest about underlying inflation How AI CapEx and data center spending may be misallocating capital away from housing and the broader economy Why the current AI boom differs from the late-1990s technology bubble How credit spreads, CDS markets and financing costs could signal trouble in the AI trade before equities do What real interest rates, the U.S. dollar and central bank demand mean for gold Why Bernstein views gold as a portfolio spare tire rather than a short-term trade Why non-U.S. stocks and international markets may offer a better valuation and growth opportunity How AI exposure extends beyond the Mag Seven into financials, industrials and utilities Why CAPE valuations, leverage, sentiment and market positioning point to a highly speculative U.S. market Why diversification becomes most unpopular when investors may need it most What Bob Farrell's market rules say about crowded positioning and consensus forecasts Timestamps 00:00 Introduction 08:31 Why Rosenberg thinks the Fed should not hike 16:02 AI, data centers and capital misallocation 25:08 What is driving gold: real rates, the dollar and central banks 36:11 Why Bernstein sees a secular shift toward non-…