4% Inflation. Stretched Valuations. Why Is the Market Still Risk-On? | Tian Yang

Tian Yang, head of research at Variant Perception and portfolio manager of the VPX ETF, explains how investors can use adaptive leading indicators, capital cycle analysis and behavioral signals to navigate a market shaped by AI spending, inflation and government intervention. He breaks down why the macro backdrop remains risk-on, what would signal a true market top, why a Federal Reserve rate hike may still be unlikely and how AI could reshape profits, jobs and portfolio construction.Variant Perceptionhttps://www.variantperception.com/Variant Perception Cycle Aware US Equity ETFhttps://etf.variantperception.com/Topics coveredHow first-principles thinking separates causal signals from noisy dataWhy static recession indicators and consumer sentiment have become less reliableHow Variant Perception combines growth, inflation, policy and liquidity into a Macro Risk IndicatorWhy AI capital spending and low savings rates are supporting economic resilienceHow AI profits could broaden from hardware bottlenecks to adopters and complementary assetsWhy the sovereign technology race may extend the AI investment cycleWhat savings rates, liquidity, leverage and cash settlement reveal about recessions and market topsHow potential SpaceX, Anthropic and OpenAI supply could affect public equity marketsWhat capital cycle and crowding signals say about semiconductors and hyperscalersWhy headline inflation may stay high without creating persistent core inflationHow the K-shaped consumer, labor market and Federal Reserve reform shape the policy outlookHow AI could widen economic inequality, compress wages and change investment researchHow the VPX ETF uses adaptive sector tilts, stock selection and active riskTimestamps00:00 First principles, causal data and leading indicators04:48 Why traditional recession indicators stopped working09:00 Building the Macro Risk Indicator13:02 How AI CapEx is keeping the economy resilient17:18 Is the AI boom different from past bubbles?21:32 Why rising savings rates often precede recessions26:11 Why the market-top warning is amber, not red30:58 Are semiconductors still cyclical?36:22 Why an oil shock may not force the Fed to hike42:12 How Kevin Warsh could reform the Federal Reserve46:50 The increasingly bifurcated economy51:11 How AI is changing investment research55:38 Active risk, playing the game and avoiding forced errorsLearn more about the Excess Returns podcast network:https://excessreturns.coNo information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.