The Long View Mike Pyle: Looking for Uncorrelated Sources of Return
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Oct 14, 2025 Mike Pyle, Managing Director at BlackRock, discusses the intricate dance between policy and economic realities. He delves into how rising tariffs shape growth and inflation while highlighting underestimated U.S. resilience. Pyle explores AI's transformative impact on productivity and the emerging opportunities in widened return dispersion for investors. He argues for the value of hedge funds in navigating macro uncertainty and suggests a careful approach to traditional bond investments, emphasizing the need for diversification in portfolio construction.
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Tariffs Raise Prices But US Resilience Shows
- Higher tariffs are a major policy tool and have materially raised U.S. effective tariff rates this year.
- Mike Pyle says tariffs slow growth and raise prices, but U.S. resilience has helped sustain positive growth and markets.
Policy Continuities Across Administrations
- Despite political differences, both recent administrations prioritize rebuilding U.S. industry and leading on AI.
- Pyle highlights important policy continuities even amid noisy political debate.
Markets Diverge: Stocks Up, Dollar Down
- Different markets price political risk differently, with U.S. equities buoyed by AI optimism while the dollar reflected macro concerns.
- Pyle notes equity strength tied to AI and dollar weakness tied to inflation, fiscal trajectory, and hedging behavior.