Cathie Wood Discusses Potential Deflationary Impact of AI on Bond Market

Cathie Wood recently shared insights on the X platform, noting that despite rising oil prices over the past three months, the yield curve remains flat, and the Federal Reserve has not monetized this energy shock. According to Odaily, the bond market may begin to absorb the deflationary effects driven by AI and technological advancements. Currently, the costs associated with AI model training and inference are significantly decreasing, leading to accelerated productivity growth while unit labor costs remain subdued. While the current market narrative focuses on tariffs, deficits, and structurally high inflation, underlying signals indicate that deflationary forces related to innovation are building. Inflation is expected to be lower than anticipated in the next 6 to 9 months, which could have significant implications for interest rates and long-term stocks.