With the Fed now tightening and energy keeping pressure on long-term yields, AI investment has become a central driver of US growth. Excluding equipment and intellectual property investment, the components most tied to AI, real GDP grew at just a 0.3% annualized rate in the first quarter and was flat in the second.

The probability of a 50bps rate cut has steadily increased over the past week (it is 63% as of today). The Fed has only cut 50bps in a...