We Asked Andy Constan What Happens If AI Funding Breaks Before the Thesis — And if Warsh Blinks

Market regimes are currently driven by strong productivity growth and significant government debt issuance, which push real yields higher despite high equity valuations. AI-driven capital expenditure relies on a "hamburger thesis," where companies utilize circular financing to build data centers, potentially creating a bubble if capital markets tighten. The Federal Reserve’s potential move to shrink its balance sheet and allow the bond market to dictate long-term rates represents a critical shift from previous suppression tactics. Furthermore, the "not enough pie" framework suggests that current S&P 500 earnings growth forecasts are mathematically unsustainable without massive GDP expansion or a radical shift in wealth distribution. Macro strategist Andy Constan emphasizes that investors must monitor corporate bond issuance and credit spreads, as these indicators provide early warning signs of market stress before capital markets close.