Future Growth Will Be Driven By Banks, Not the Fed | Andy Constan

Summary

Andy Constan argues the market is moving from Fed-dominated liquidity to a private-credit and bank-driven regime. Promises to fund AI/data centers, onshoring, and deficits will require heavy borrowing and asset sales, supporting real-economy growth and equities while pressuring bonds and credit spreads. He is cautious on onshoring, sees AI spending as strong but financing-sensitive, and warns gold and crypto may lag as the debasement impulse fades. Foreign funding promises could also trigger Treasury selling or a dollar selloff.

• Andy Constan sees central-bank money creation becoming less important than private-sector credit creation.
• AI/data-center and onshoring promises are large relative to normal credit demand and need funding from corporate bonds, bank loans, and asset sales.
• Private credit spent in the real economy is bullish for growth/equities and bad for bonds; credit spreads are not attractive.
• Gold and crypto may underperform as central-bank debasement fades and credit flows to real investment rather than financial assets.
• AI spending remains strong, but data-center equity trades are sensitive to debt issuance and credit spreads.
• Foreign FDI promises may be funded by selling US Treasuries, with a possible large US dollar selloff.
• Onshoring is viewed as costly insurance rather than an economically efficient growth driver.
• Andy emphasizes monitoring funding flows, interest rates, and credit spreads to assess whether the promises are fulfilled.