AI-related capital expenditure is a significant driver of global GDP growth, potentially offsetting negative impacts from energy price shocks. However, this rapid expansion is creating supply chain bottlenecks in critical areas like power generation and transformers, shifting investment focus to infrastructure enablers.
The Fed faces a highly uncertain path, described as a 'fork in the road.' While the base case is for rates to remain on hold, conflicting data on inflation, AI-investment costs, and shifting Chinese price trends create viable scenarios for either rate cuts or further hikes.
Iran is actively using the Strait of Hormuz as strategic leverage in negotiations with the U.S. Securing this narrow and geographically challenging waterway would require a massive, prolonged military escort mission, highlighting the vulnerability of global energy supplies to regional conflicts.
International investors are increasingly concerned about de-dollarization and the 'weaponization of the US dollar.' This is driving continued interest in gold as a hedge and prompting a search for diversification in other markets, with China and Chinese tech being cited as an important theme.
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