Sep 11, 2026 · 1h 8m
Listen from 2:29
Listen at 2:29
AI borrowing puts yields, markets and Korea in focus
The Most Interesting Macro Moment of My Lifetime with Jens Nordvig
The episode maps how government deficits, hyperscaler financing and AI-related demand could reshape inflation, currencies, bonds and equities.
- 1Hyperscaler borrowing could add pressure to long-term yields as AI infrastructure spending competes with heavy Treasury issuance.
- 2AI may suppress inflation eventually, but its construction phase is driving demand for energy, memory, metals and infrastructure.
- 3Jens Nordvig sees Korea as a compelling investment opportunity through 2027, powered by memory demand, wages, dividends and consumption.
Don't miss
Jens Nordvig identifies Korea as his most interesting macro investment opportunity through 2027, linking memory demand to a wider economic boom.
The brief
Jens Nordvig joins Josh Brown and Michael Batnick to examine a macro environment he considers more consequential than earlier crises, with yields, debt and AI investment moving together.
The central tension is whether AI’s buildout becomes inflationary before its productivity gains arrive, as data centers pull in energy, memory, metals and infrastructure.
Heavy Treasury issuance and hyperscaler borrowing could push long-term yields sharply higher, weakening the dollar and exposing equities to a nonlinear market shock.
The discussion also challenges simple readings of the American consumer, noting resilient spending, tax refunds, travel and a strong labor market despite higher rates.
Nordvig’s standout trade is Korea through 2027, where memory demand, rising wages, dividends, investment and consumer growth could reinforce a broader macro transformation.
What was said on this episode
49 statements · 20 positive · 22 negative · 2 mixed · 5 neutral
Apple’s iPhone Duo will sell out its limited initial production.
“I think it's going to be a slam dunk, the iPhone 2. I think they'll sell out however many they can make, which will not be a lot.”
Listen at 2:53
The iPhone Duo will sell out immediately because its design is novel.
“I think they'll sell out immediately because it's novel.”
Listen at 3:05
Apple’s next iPhone Duo iteration will be larger, faster, and more expensive.
“Which leads me to believe the next iteration will be the Duo Pro. And it'll somehow be bigger and faster and it'll cost more.”
Listen at 4:03
At $2,000, the iPhone Duo will sell out and match iPhone 18 Pro Max pricing.
“I think at $2,000, it's roughly comparable with what the iPhone 18 Pro Max will be. I think they'll sell them out.”
Listen at 4:21
The merged Vanda and Exante Data will be best-in-class for flows and positioning analytics.
“So now we think we can absolutely be the best in class in that space.”
Listen at 9:53
Vanda will use AI in a novel way in its upcoming analytics platform.
“We're going to use AI, I think, in a novel way.”
Listen at 11:21
A hybrid of high-quality data and timely interpretation is commercially optimal.
“a combination of having really high-quality data and some lay on top that tells people, okay, this is important right now, is the best model commercially”
Listen at 12:19
AI can perform some research tasks better and faster than humans.
“there's bits and pieces where we can say, okay, the robot can actually do this piece better and faster.”
Listen at 13:58
Market models can become outdated as market microstructure changes.
“the machine might get outdated, right? So we need to continually make sure that we know what's happening in the market.”
Listen at 16:01
Korean equity returns and foreign investor flows have become negatively related.
“the correlation between those flows and the... Cosby has totally flipped.”
Listen at 17:20
Models must be continually adjusted to reflect changing market conditions.
“So you need to adjust your models all the time to capture what is new.”
Listen at 17:37
Vanda’s proprietary data will not be known to general-purpose LLMs.
“we're incredibly focused on actually having proprietary data as a part of our platform, right, which the LLM will not know about.”
Listen at 19:22
Vanda will limit AI sharing when it threatens the proprietary nature of its data.
“if we have something that's proprietary and we feel that aspect of it being proprietary is threatened by us sharing it that way, clearly we'll have to balance those two things.”
Listen at 19:59
AI’s productivity impact may exceed previous industrial revolutions and technological shocks.
“this seems more profound than any of them.”
Listen at 23:14
Hyperscalers are issuing long-term debt at roughly the U.S. government’s pace.
“we now have as much bond issuance by hyperscalers in the long end of the curve as the United States government.”
Listen at 23:56
Hyperscaler and government borrowing competition is pushing bond yields higher.
“Now we have such competition for capital that yields are being pushed higher.”
Listen at 25:43
Google, Microsoft, Amazon, and Meta will accelerate capital spending this year and next.
“their CapEx plans for this year and next year have continued acceleration in them”
Listen at 26:16
Hyperscaler bond issuance next year will greatly exceed this year’s issuance.
“next year is going to be like dramatically more than this year.”
Listen at 26:35
Current debt levels make historical bond yields harder for the economy to sustain.
“what we could handle back then with that level of yields, it's hard to imagine we can handle it now.”
Listen at 28:22
The U.S. debt-to-GDP ratio will reach 200% within decades.
“It's going to 200. within a couple of decades.”
Listen at 29:27
Weakness in U.S. long-term bonds is associated with a weaker dollar.
“you can start to see some kind of correspondence between when the 30 in the U.S. started to wobble and the dollar starting to leak.”
Listen at 31:27
Equities are close to becoming highly vulnerable to further yield-curve moves.
“We're very close to an amount of move in the yield curve where the equities get very vulnerable.”
Listen at 32:19
Treasury buybacks aim to prevent debt dynamics from driving yields into a negative spiral.
“they're trying to stop this negative spiral by holding the yields via these buybacks.”
Listen at 33:43
The administration favors a weaker dollar against Asian currencies to support U.S. manufacturing.
“I think they would like to have a weaker dollar against Asian currencies because they feel that could help manufacturing in some parts of the country.”
Listen at 36:10
The administration may pursue currency weakness despite ongoing inflation problems.
“the administration is willing to endorse currency weakness and even actively pursue it. while we have inflation problems at the same time.”
Listen at 37:41
Persistently higher energy prices can become embedded in inflation expectations.
“higher energy prices are embedded, like are the new like inflation expectation. And it's hard to shake that once it starts.”
Listen at 38:26
Equities will react if the recent yield increase continues for several weeks.
“I will be surprised if we have a couple of more weeks of this yield move. I'll be very surprised if there's not a reaction in equities.”
Listen at 39:14
Five-year inflation breakevens rose from roughly 2.2% to 2.4–2.5%.
“if you look at five-year break-even, right, it was 2-2, now it's 2-4, 2-5.”
Listen at 40:32
AI and energy inflation are adding pressure while inflation is already above target.
“The AI inflation is here. The energy inflation is there. And they're coming from an inflation level that is already above target.”
Listen at 40:43
Leading AI companies’ valuations are not extreme if they become winners.
“actually their valuations, if they are going to be the winners or one of the winners, like the valuation is not that extreme”
Listen at 45:36
Rapidly changing AI narratives make the software-winner thesis unreliable.
“The narratives are changing so fast. I wouldn't even rest comfortably on this new software thesis”
Listen at 46:54
Long-term institutional investors are focusing on power plants and grid infrastructure.
“their main focus has been on the energy, right? So they would invest in the power plant or grid infrastructure.”
Listen at 47:37
Gold price targets for the next few months should be moderated.
“I think that means that the targets you want to have for gold in the next couple of months needs to be tempered”
Listen at 50:12
Gold will remain supported even if real interest rates rise.
“even if real rates continue to go up, gold is going to have some support.”
Listen at 50:35
Demand for gold as a hedge will persist over multiple quarters.
“on a multi-quarter horizon, that demand will be there.”
Listen at 50:50
Recent consumer spending strength partly reflects temporary tax-refund stimulus.
“I think some of what you're seeing in these charts you show there was sort of the juice from those tax refunds.”
Listen at 55:53
Experience spending is consistent with strong aggregate credit-card spending.
“the experiences chart tells the same story as all those credit card spending charts.”
Listen at 56:48
Recent U.S. labor-market readings have substantially exceeded expectations.
“the labor market has surprised massively on the upside in the last couple of readings”
Listen at 58:32
The U.S. economy is not currently collapsing.
“the economy is not falling apart”
Listen at 58:37
Investors are concerned that oil prices will continue rising.
“people are definitely worried that we're going to just have oil prices continuing to go up”
Listen at 59:24
A rapid 20–35 basis-point long-end yield move creates danger for markets.
“When the long end moves quickly, 20, 30, 35 basis point, it gets into danger territory.”
Listen at 1:00:04
Debt concerns are beginning to affect investor asset allocation.
“I think we can start to sniff it.”
Listen at 1:01:05
Continued hyperscaler issuance could create major housing-market problems next year.
“heading into next year, it's going to be a problem. It could be a massive problem for housing markets.”
Listen at 1:02:06
Mortgage resets will worsen housing-sector problems.
“there are going to be housing sector issues that are going to be exacerbated.”
Listen at 1:02:40
Accelerating hyperscaler issuance could raise bond yields by another one or two percentage points.
“if this hyperscaler issuance continues to accelerate, then we might get another percent or another percent on top of what we've already seen.”
Listen at 1:03:46
The stock bull market could end as hyperscalers become major debt issuers.
“It would be very ironic and interesting if the bull market for stocks comes to an end because the hyperscalers went from being like the biggest cash-generating companies in history to being the largest debtor companies in history”
Listen at 1:03:56
Market flows are moving toward a potential hyperscaler-debt-driven stock-market reversal.
“if you look at the flows, that's the direction we're going.”
Listen at 1:04:37
Korean equities can continue rising substantially as Korea’s macro trend develops.
“I think one of the most important and pronounced macro trends is playing out in Korea. I think that trade can continue to go in a massive way.”
Listen at 1:04:55
Korea’s wages, dividends, investment, and consumer growth will strengthen broadly.
“The growth is going to be there. They're going to invest. It's like. On all cylinders.”
Listen at 1:05:36
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.