Sep 25, 2026 · 53 min
Laffer says bond yields signal more than inflation
Art Laffer On Bond Market MELTDOWN: How Bad Could It Get?
The episode tests whether rising oil prices and Treasury yields threaten the U.S. economy or reflect stronger real returns and productivity.
- 1Art Laffer separates rising bond yields into real returns and inflation expectations rather than treating them as one warning signal.
- 2He argues oil shocks need not create permanent inflation and that AI-driven productivity could raise output, wages, and living standards.
- 3Laffer rejects targeted billionaire taxes in favor of a simple, low-rate, broad-based flat tax with fewer distortions.
Don't miss
Art Laffer argues that AI-driven productivity can raise output while lowering inflation, challenging the idea that automation must destroy prosperity.
The brief
Art Laffer argues that the U.S. economy remains resilient despite high oil prices and rising bond yields, setting up a debate over whether markets signal danger or strength.
On Iran, sanctions, shipping disruptions, and proposed diesel-export bans, Laffer favors targeted pressure and market incentives over broad restrictions that distort supply.
Laffer says the Federal Reserve should distinguish temporary oil-driven price increases from persistent inflation, while tracking real returns, expectations, and monetary conditions.
The conversation turns to AI, where Laffer argues that productivity gains can increase output, lower inflation, and raise the value of both capital and labor.
On inequality and billionaire taxation, Laffer defends innovation and relocation incentives before making the case for one low, broad-based flat tax.
Books & mentions
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