Too Much Complacency?

Our Roaring 2020s thesis holds that the demand side of real GDP remains supported by resilient consumer spending and robust business investment. On the supply side, tech-led productivity is boosting real GDP, while keeping a lid on inflation. Now that the economy has proven its mettle over the first seven years of the decade, it should continue to do so over the remaining three years of the Roaring 2020s.

While our Roaring 2020s thesis has been a contrarian view for much of this decade, it is increasingly accepted. We are in good company. Both US Treasury Secretary Scott Bessent and Fed Chair Kevin Warsh are vocal proponents of the productivity-led economy story. Investors have been increasingly betting on it, as evidenced by record-high stock prices and stable bond yields.