Brusuelas: "What a Time to Be Alive" in the Markets

• Q4 GDP expected at 2.6% (below consensus) due to the impact of a government shutdown.
• PCE price index (core) is expected around 2.9%, with a risk of a 3% or greater print, potentially becoming the new inflation floor.
• Higher inflation implies higher interest rates, leading to risk aversion in the bond market and a more introspective approach to capital management.
• The economy is undergoing a structural transformation driven by artificial intelligence, which will bring both acceleration and disruption across various sectors.

RSM's Joe Brusuelas discusses Q4 GDP and PCE, expecting lower GDP due to government shutdown but higher core inflation around 3%. He highlights the bond market's risk aversion and the economy's structural transformation driven by AI, leading to higher interest rates and potential disruption in sectors like insurance and software.