Falling Rates. Rising Productivity. Are Good Things Bearish?

In this week's Excess Returns Weekly Wrap, Jack Forehand and Matt Zeigler break down Jim Paulsen's warning that falling Treasury yields could become bad news for stocks if markets shift from inflation fears to growth fears, and Dom Rizzo's bullish case for AI productivity and frontier models. They also examine whether today's productivity boom is real, how AI coding tools like Claude Code and Codex could reshape white-collar work, and why recessions can create misleading spikes in measured productivity.Topics coveredWhy falling Treasury yields can be bullish when inflation is cooling but bearish when growth is weakeningJim Paulsen's case that economic surprise data could be pointing toward lower 10-year Treasury yieldsWhat the stock-bond correlation says about whether investors are more worried about inflation or recessionDom Rizzo's bullish case for AI-driven coding productivity and the rapid growth of frontier AI modelsHow large the AI coding market could become and where OpenAI, Anthropic and other AI companies may capture valueWhy open-source and lower-cost AI models could dominate token volume while frontier models capture most of the economicsWhether enterprise AI spending is evidence that companies are already seeing meaningful returnsThe challenge of translating more code and faster knowledge work into measurable revenue, cost savings and economic productivityJim Paulsen's argument that recessions often create temporary spikes in measured productivityWhether today's productivity gains reflect a genuine AI boom, economic weakness, or some combination of bothTimestamps00:00 Why hearing the AI case you disagree with matters04:47 When falling Treasury yields could become bad news for stocks10:54 Dom Rizzo on AI coding productivity and who captures the value16:49 Can we actually measure the economic payoff from AI?22:52 Jim Paulsen on why recessions can create false productivity booms27:00 What today's productivity data may be saying about the economyLearn 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.