RENICK Let s talk ░░░░░░░░ the economy and how ░░░░░░░░ Tech works into the ░░░░░░░░ for the economy and ░░░░░░░░ AI s role still ░░░░░░░░ yet to be discovered ░░░░░░░░ Cleveland principal and chief ░░░░░░░░ of Payden Rygel is ░░░░░░░░ with us this afternoon ░░░░░░░░ us from the great ░░░░░░░░ of Angels What s ░░░░░░░░ Jeff CLEVELAND Good afternoon ░░░░░░░░ Beautiful day here RENICK ░░░░░░░░ I can see that ░░░░░░░░ m a little jealous ░░░░░░░░ Yeah you can stop ░░░░░░░░ anytime RENICK Love to ░░░░░░░░ from you Don t ░░░░░░░░ to see the background ░░░░░░░░ Maybe a little bit ░░░░░░░░ Hey how do these ░░░░░░░░ companies right now factor ░░░░░░░░ your outlook as an ░░░░░░░░ Jeff Like they ve ░░░░░░░░ to play some role ░░░░░░░░ Like shouldn t AI ░░░░░░░░ and capex all this ░░░░░░░░ have some effect on ░░░░░░░░ or margin somewhere CLEVELAND ░░░░░░░░ let s hope I ░░░░░░░░ the main thing is ░░░░░░░░ for us RENICK Exactly ░░░░░░░░ You know better productivity ░░░░░░░░ great news from the ░░░░░░░░ perspective If we have ░░░░░░░░ growth Oliver that means ░░░░░░░░ we can continue to ░░░░░░░░ 2 to 3 percent ░░░░░░░░ GDP numbers and have ░░░░░░░░ inflation So I think ░░░░░░░░ some sectors you know ░░░░░░░░ people in the bond ░░░░░░░░ worry that growth is ░░░░░░░░ because it generates inflation ░░░░░░░░ drive up interest rates ░░░░░░░░ productivity if it s ░░░░░░░░ by AI or any ░░░░░░░░ factor will give us ░░░░░░░░ growth with moderate inflation ░░░░░░░░ that s the main ░░░░░░░░ that we re wrestling ░░░░░░░░ you know among the ░░░░░░░░ here we talk a ░░░░░░░░ about DeepSeek versus Claude ░░░░░░░░ ChatGPT So we have ░░░░░░░░ own sort of in ░░░░░░░░ attempts to look at ░░░░░░░░ these different approaches RENICK ░░░░░░░░ Gemini in there too ░░░░░░░░ Gemini is I didn ░░░░░░░░ mean to forget Gemini ░░░░░░░░ apologize RENICK Yeah just ░░░░░░░░ phone Jeff it really ░░░░░░░░ something that feels I ░░░░░░░░ kind of surprised at ░░░░░░░░ you know they don ░░░░░░░░ get the reporters don ░░░░░░░░ press Powell even harder ░░░░░░░░ of on the notion ░░░░░░░░ this productivity being disinflationary ░░░░░░░░ that just because the ░░░░░░░░ phase is a little ░░░░░░░░ more traditionally pro cyclical ░░░░░░░░ first Or how does ░░░░░░░░ differ if it s ░░░░░░░░ going to servers and ░░░░░░░░ CLEVELAND I mean you ░░░░░░░░ talk to the reporters ░░░░░░░░ much as I do ░░░░░░░░ I think there s ░░░░░░░░ element of you know ░░░░░░░░ is the topic du ░░░░░░░░ if you will And ░░░░░░░░ now it is Trump ░░░░░░░░ is tariffs it is ░░░░░░░░ bit of an inflation ░░░░░░░░ that is predominating you ░░░░░░░░ a lot of discussions ░░░░░░░░ I think you saw ░░░░░░░░ with the focus of ░░░░░░░░ questions If if core ░░░░░░░░ starts to cool off ░░░░░░░░ the months ahead which ░░░░░░░░ think it will Oliver ░░░░░░░░ I think that the ░░░░░░░░ will shift People will ░░░░░░░░ wait wait a second ░░░░░░░░ re approaching 2 percent ░░░░░░░░ There s some risk ░░░░░░░░ could even dip below ░░░░░░░░ percent inflation and what ░░░░░░░░ driving that And then ░░░░░░░░ the productivity angle becomes ░░░░░░░░ bigger topic of conversation ░░░░░░░░ I just think it ░░░░░░░░ the you know Trump ░░░░░░░░ the discussion right now ░░░░░░░░ that s the questions ░░░░░░░░ reporters are asking RENICK ░░░░░░░░ are there figures available ░░░░░░░░ far in terms of ░░░░░░░░ AI impact on the ░░░░░░░░ I mean because again ░░░░░░░░ re having this discussion ░░░░░░░░ the stock market would ░░░░░░░░ you know this is ░░░░░░░░ implications that this is ░░░░░░░░ changing stuff And when ░░░░░░░░ re spending billions I ░░░░░░░░ it s got to ░░░░░░░░ its way somewhere into ░░░░░░░░ positive you know realm ░░░░░░░░ it s just going ░░░░░░░░ going to the robots ░░░░░░░░ like we re still ░░░░░░░░ the robots mostly CLEVELAND ░░░░░░░░ has shown up in ░░░░░░░░ last year and in ░░░░░░░░ of capex in terms ░░░░░░░░ structures So we ve ░░░░░░░░ a lot of non ░░░░░░░░ construction of structures that ░░░░░░░░ related to data warehousing ░░░░░░░░ things of that nature ░░░░░░░░ it showed up in ░░░░░░░░ economic growth data from ░░░░░░░░ perspective I think the ░░░░░░░░ growth we re seeing ░░░░░░░░ of the best productivity ░░░░░░░░ if you look at ░░░░░░░░ productivity that we ve ░░░░░░░░ in maybe 50 years ░░░░░░░░ the last four quarters ░░░░░░░░ s more than just ░░░░░░░░ though Oliver I ll ░░░░░░░░ it if AI helps ░░░░░░░░ that but it s ░░░░░░░░ fact that the U ░░░░░░░░ economy is just better ░░░░░░░░ in a lot of ░░░░░░░░ So new business formation ░░░░░░░░ the U S is ░░░░░░░░ better than what we ░░░░░░░░ in say you know ░░░░░░░░ to pick on Europe ░░░░░░░░ Europe So that you ░░░░░░░░ tend to start a ░░░░░░░░ company because you have ░░░░░░░░ new idea that helps ░░░░░░░░ output So that helps ░░░░░░░░ We saw a lot ░░░░░░░░ churn in our labor ░░░░░░░░ than they did in ░░░░░░░░ You know people stayed ░░░░░░░░ payrolls at their current ░░░░░░░░ through Covid In the ░░░░░░░░ S people were laid ░░░░░░░░ people moved on And ░░░░░░░░ of that they probably ░░░░░░░░ up being better matched ░░░░░░░░ other firms where they ░░░░░░░░ more productive So overall ░░░░░░░░ the macro perspective this ░░░░░░░░ I think has helped ░░░░░░░░ U S from a ░░░░░░░░ perspective It s more ░░░░░░░░ just AI that we ░░░░░░░░ seeing so far in ░░░░░░░░ data RENICK Like that ░░░░░░░░ stuff Jeff always a ░░░░░░░░ take Thanks for working ░░░░░░░░ the tech side for ░░░░░░░░ this afternoon with the ░░░░░░░░ Appreciate it CLEVELAND Happy ░░░░░░░░ do it RENICK Have ░░░░░░░░ good one sir CLEVELAND ░░░░░░░░ RENICK Jeff Cleveland principal ░░░░░░░░ chief economist at Payden ░░░░░░░░