Monetary Matters with Jack Farley The Lopsided Expansion | Aahan Menon on Why Long-Term Forecasts Don’t Make Money, And The Growing Divergence Between AI CapEx And Labor Market
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Nov 29, 2025 In this conversation, Aahan Menon, founder of Prometheus Macro and a renowned macro strategist, discusses the troubling divergence between surging AI capital expenditures and a weakening labor market. He highlights why long-term forecasting often fails to provide alpha and details his new neutral stance on risk across equities and commodities. Aahan also explains the implications of his strategies, emphasizing the need for short-term market signals over outdated long-term predictions, and reveals his cautious positioning in current markets.
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From Max Bullish To Market-Neutral
- Aahan Menon says Prometheus shifted from "max bullish" to neutral, reducing equity and commodity exposure.
- They now favor market-neutral and relative-value trades across sectors and bond markets.
AI CapEx Masks Labor Weakness
- Aahan highlights a major divergence: strong GDP driven by AI CapEx vs weakening labor markets.
- He warns GDP will likely mean-revert toward employment, pressuring growth and earnings sustainability.
The Circularity Problem Of CapEx
- CapEx must eventually convert into consumption, which requires broad wage growth and employment.
- Aahan argues AI CapEx cannot alone sustain the whole economy as it needs financing and eventual consumer absorption.