Excess Returns Cullen Roche on Inflation, AI and Why the Debt Crisis is Overblown
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Sep 10, 2025 Cullen Roche, founder of Discipline Funds and a macroeconomic expert, shares insights on various economic dynamics. He discusses why fears of a debt crisis may be exaggerated, highlights disinflationary pressures shaping the U.S. economy, and explores the Federal Reserve's challenges amid high inflation. Cullen examines the transformative role of AI in productivity and job markets, along with the impacts of demographics and immigration. His innovative 'defined duration' investment strategy offers a fresh perspective on asset allocation.
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Economy Returning To Pre-COVID Norms
- The post-COVID economy is mean-reverting toward a 2019-like state of low growth and moderate inflation.
- Cullen Roche sees the process as ongoing but nearing completion.
Shelter Is The Inflation Story
- Shelter costs remain the key driver keeping inflation stickier than expected.
- Roche expects shelter to decline, making broad disinflation more likely than renewed high inflation.
Fed Achieved Much But Not Finished
- The Fed acted counter-cyclically and likely prevented worse inflation outcomes.
- Roche praises the Fed's performance but says the mission isn't fully accomplished yet.