Animal Spirits Podcast Talk Your Book: JP Morgan's Long-Term Capital Market Assumptions
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Oct 27, 2025 
Gabby Santos, J.P. Morgan's Chief Market Strategist for the Americas, dives into the bank's annual Long-Term Capital Market Assumptions report. She discusses the influence of economic nationalism, fiscal activism, and AI innovation on market dynamics. Gabby explains why traditional 60-40 portfolios may struggle and highlights alternatives like gold and real estate for better diversification. She also explores the potential for international markets to outperform the U.S. and weighs the impact of tech on inflation. Plus, is there a tech bubble? Gabby shares her insights!
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Three Forces Reshaping Global Capital
- Economic nationalism, fiscal activism and AI adoption are interconnected forces reshaping capital allocation globally.
- These forces amplify domestic CapEx and require both public and private capital to build industries like semiconductors.
Build Forecasts From Valuation And Forces
- Use starting valuations, long-term forces, and stress tests as your planning framework rather than fixating on precise basis points.
- Update assumptions regularly and treat the forecasts as 10–15 year guideposts, not next-year predictions.
Protectionism Raises Inflation And Curve Steepness
- Economic nationalism can raise long-term inflation by altering supply chains and raising costs passed to consumers.
- That shift also implies steeper yield curves and more unstable stock-bond correlations, reducing bonds' diversifying power.