RiskReversal Pod Neil Dutta on Housing, The Consumer & AI Fueled Growth
Aug 15, 2025
Neil Dutta, Partner and Head of Economic Research at Renaissance Macro Research, shares his insights on the U.S. housing market and the labor dynamics shaping it. He delves into the effects of high mortgage rates and weak demand on construction. The conversation shifts to AI's role in potentially boosting GDP, while echoing concerns about its investment momentum. Dutta also outlines the Federal Reserve’s priorities on inflation versus employment and emphasizes defensive market strategies amid current economic uncertainties.
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Early Wall Street Training
- Neil Dutta started at Merrill Lynch working for David Rosenberg and later Ethan Harris before joining Renaissance Macro in 2012.
- He describes learning both street-facing and academic approaches to economics early in his career.
Housing Recession Is Rate-Driven
- Housing is in a recession driven by restrictive monetary policy and high mortgage rates, not tariffs.
- Declines are concentrated in builder-heavy markets (Florida, Texas, Arizona) and threaten construction employment.
Monitor Builders For Early Warnings
- Watch builder order backlogs and resale inventory as leading indicators for construction activity.
- Use builder balance sheets and their willingness to offer rate buy-downs as signals of market stress.