Aptus Capital Advisors portfolio manager and head of fixed income John Luke Tyner said in a report that markets still need to watch whether AI capital spending and data center construction will be affected after Democrats made gains in gubernatorial races, or whether that spending simply shifts to states with friendlier government policies. Tyner said he expects the investment pace to slow, though probably not by as much as the market fears. On Federal Reserve policy, he said that if the main inflation pressure is coming from energy prices and AI spending, then the 25-basis-point rate hike delivered in September was likely the final increase of the current tightening cycle. He also said government gridlock usually weighs on GDP growth, which could leave room for the entire yield curve to move lower.
According to Jin10, Aptus Capital Advisors portfolio manager and head of fixed income John Luke Tyner said in a report that, after Democrats made gains in gubernatorial elections, markets still need to watch whether AI capital spending and data center construction will be affected, or whether the spending will simply move to states with more government-friendly policies.
Tyner said he expects that investment to slow, but likely not by as much as the market fears.
View on the Federal Reserve
Asked whether the Federal Reserve could raise rates again, Tyner said that if the main inflation pressure comes from energy prices and AI spending, then the 25-basis-point hike in September was likely the last increase in the current rate-hike cycle.
Gridlock and the yield curve
He also said government gridlock usually drags on GDP growth, which could open room for further declines across the entire yield curve.
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