Jason Furman

Furman states that while AI hasn't boosted supply-side productivity yet, it was a "big factor on the demand side" in 2025 and will be bigger in 2026 due to money spent building data centers and energy supply. The economic boost is currently found in the *build-out* phase. Capital expenditure is flowing heavily into physical infrastructure required to support AI models, regardless of the software's current utility. Long the physical beneficiaries of AI spending (utilities, grid, construction). AI capex spending slows down if ROI remains elusive.

Furman states that while AI hasn't boosted supply-side productivity yet, it was a "big factor on the demand side" in 2025 and will be bigger in 2026 due to money spent building data centers and energy supply. The economic boost is currently found in the *build-out* phase. Capital expenditure is flowing heavily into physical infrastructure required to support AI models, regardless of the software's current utility. Long the physical beneficiaries of AI spending (utilities, grid, construction). AI capex spending slows down if ROI remains elusive.

Furman explicitly states that tariffs have "added a meaningful amount to inflation," citing rising prices in furniture and consumer electronics. With the President doubling down on "reciprocal tariffs" (5-8% surcharges) despite court rulings, inflationary pressure is structural, not transitory. If the administration replaces income tax with tariffs (a "ludicrous" idea per Furman, but a signaled intent), inflation expectations will unanchor. Long inflation hedges (TIPS, Gold) to protect against policy-induced price increases. The Supreme Court successfully blocks all new tariff implementations, causing deflationary pressure as goods prices normalize.

Furman states that "AI was a big factor on the demand side in the economy in 2025" and expects it to be bigger in 2026, specifically citing "money that's spent building data sensors, the energy to supply them." The economic resilience is being underpinned by AI infrastructure capex. This confirms the "picks and shovels" trade is still active in 2026. The specific mention of "energy to supply them" highlights the bottleneck shifting from chips to power generation and cooling. Long the AI infrastructure stack: Chips (NVDA), Cooling/Infrastructure (VRT), and Power Generation (Utilities). Overinvestment leads to a capex cycle bust if AI monetization slows down.

Furman explicitly states that tariffs have "added a meaningful amount to inflation," citing rising prices in furniture and consumer electronics. With the President doubling down on "reciprocal tariffs" (5-8% surcharges) despite court rulings, inflationary pressure is structural, not transitory. If the administration replaces income tax with tariffs (a "ludicrous" idea per Furman, but a signaled intent), inflation expectations will unanchor. Long inflation hedges (TIPS, Gold) to protect against policy-induced price increases. The Supreme Court successfully blocks all new tariff implementations, causing deflationary pressure as goods prices normalize.

Furman states that "AI was a big factor on the demand side in the economy in 2025" and expects it to be bigger in 2026, specifically citing "money that's spent building data sensors, the energy to supply them." The economic resilience is being underpinned by AI infrastructure capex. This confirms the "picks and shovels" trade is still active in 2026. The specific mention of "energy to supply them" highlights the bottleneck shifting from chips to power generation and cooling. Long the AI infrastructure stack: Chips (NVDA), Cooling/Infrastructure (VRT), and Power Generation (Utilities). Overinvestment leads to a capex cycle bust if AI monetization slows down.