Why Apollo Global's chief economist expects only one rate cut in 2026

Watch on YouTube ↗  |  January 02, 2026 at 18:44  |  3:36  |  CNBC
Speakers
Torsten Slok — Partner, Apollo Global Management
Steve Liesman — Senior Economics Reporter

Summary

Torsten Slok, chief economist at Apollo Global Management, tells CNBC's Steve Liesman that he expects only one Fed rate cut in 2026 because economic tailwinds are accumulating and inflation is near 3%. He argues that weak employment data may reflect slower immigration and labor supply rather than weaker labor demand. Slok also warns that the AI data center and energy buildout has masked manufacturing weakness, and an AI rollover could expose a K-shaped economy.

  • Torsten Slok expects only one Fed rate cut in 2026.
  • He cites fiscal stimulus, fading trade-war headwinds, lower oil, a weaker dollar, and easy financial conditions.
  • He says weak jobs data may be supply-driven due to slower immigration.
  • AI data center and energy investment accounted for a significant share of 2025 growth.
  • If AI rolls over, manufacturing weakness and a K-shaped corporate economy could become more visible.
  • Steve Liesman presents a pessimistic scenario on tariffs and AI masking economic weakness.
Ideas
Torsten Slok Partner, Apollo Global Management 0:15
Only one Fed cut in 2026
Torsten expects only one Fed rate cut in 2026 because the US economy is getting a series of tailwinds: the trade war is fading, the One Big Beautiful Bill is projected to add 0.9 percentage points to GDP, oil prices are lower, the dollar has weakened, and financial conditions remain easy. With inflation close to 3%, these factors make it difficult for the Fed to cut rates as much as markets might hope.
US Treasury yields HIGH
Torsten Slok Partner, Apollo Global Management 2:33
AI rollover would expose manufacturing weakness
AI data center and associated energy buildout accounted for a significant share of 2025 growth and has been masking underlying weakness in manufacturing and other parts of the economy. If the AI story rolls over, such as Magnificent Seven earnings weakening or the industry converging to one large language model, the manufacturing and K-shaped corporate weakness would become more visible. This makes Magnificent Seven earnings a key setup to monitor.
MAGS MED
Torsten Slok Partner, Apollo Global Management 3:04
US manufacturing remains weak
Manufacturing employment and the ISM have been weak for nine to ten months, indicating persistent weakness in the US manufacturing sector. This weakness has been masked by the AI data center and energy buildout, and could become more pronounced if AI investment slows.
US manufacturing MED
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This CNBC video, published January 02, 2026, features Torsten Slok discussing US Treasury yields, MAGS, US manufacturing. 3 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Torsten Slok  · Tickers: US Treasury yields, MAGS, US manufacturing