Episode
We Asked Andy Constan What Happens If AI Funding Breaks Before the Thesis — And if Warsh Blinks
- Podcast
- Excess Returns
- Published
- Aug 20, 2026
- Duration seconds
- 3646
- Processing state
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Summary
Andy Constan is back on First Principles to explain why record stock prices, rising long-term Treasury yields and sticky inflation can all coexist, and why the next major market risk may come from the financing behind the AI CapEx boom rather than the eventual return on that investment. We discuss Kevin Warsh and Fed balance sheet policy, Treasury issuance and the quarterly refunding announcement, corporate bond and equity supply, Nvidia's $500 billion financing structure, and Andy's "not enough pie" framework for comparing AI earnings expectations with GDP and productivity growth. Follow First Principles on Spotify Follow First Principles of Apple Podcasts Topics covered Why rising long-term interest rates can be consistent with strong economic growth and record stock prices Why Andy does not see higher government interest costs creating an imminent U.S. debt crisis The "script to kill inflation" and why reducing the wealth effect may require lower stock, bond and asset prices How the Fed, Treasury and other policymakers have suppressed long-term interest rates and risk premiums Why Kevin Warsh's comments about the Fed balance sheet and letting the bond market "do the work" could signal a policy shift How Treasury bill issuance, coupon issuance and the quarterly refunding announcement can affect stocks, bonds and financial conditions Why the AI CapEx boom is shifting from cash flow funding toward massive corporate debt and equity issuance Andy's "hamburger thesis" and why the ability to finance AI infrastructure may matter before anyone knows the ultimate AI ROI Why capital markets can suddenly close after issuance booms and what that could mean for the AI investment cycle How Nvidia's $500 billion financing structure expands…