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 covered
Why falling Treasury yields can be bullish when inflation is cooling but bearish when growth is weakening
Jim Paulsen’s case that economic surprise data could be pointing toward lower 10-year Treasury yields
What the stock-bond correlation says about whether investors are more worried about inflation or recession
Dom Rizzo’s bullish case for AI-driven coding productivity and the rapid growth of frontier AI models
How large the AI coding market could become and where OpenAI, Anthropic and other AI companies may capture value
Why open-source and lower-cost AI models could dominate token volume while frontier models capture most of the economics
Whether enterprise AI spending is evidence that companies are already seeing meaningful returns
The challenge of translating more code and faster knowledge work into measurable revenue, cost savings and economic productivity
Jim Paulsen’s argument that recessions often create temporary spikes in measured productivity
Whether today’s productivity gains reflect a genuine AI boom, economic weakness, or some combination of both
Full Transcript: Weekly Wrap on AI Productivity and Falling Rates
Jack: Welcome to the Excess Returns Weekly Wrap. I’m Jack Forehand, joined as always by Matt Zeigler. Matt, what’s going on?
Timestamps
00:00 Why hearing the AI case you disagree with matters
04:47 When falling Treasury yields could become bad news for stocks
10:54 Dom Rizzo on AI coding productivity and who captures the value
16:49 Can we actually measure the economic payoff from AI?
22:52 Jim Paulsen on why recessions can create false productivity booms
27:00 What today’s productivity data may be saying about the economy
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No 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.
