Dr. Alan O'Sullivan

What's the required or expected return beyond expectations?

But I get your question because especially inflation risk premium, it tended to be higher when inflation expectations were high.

I think there is sort of level dependent inflation uncertainty.

So inflation uncertainty used to be high in 1980s when inflation level was high and an inflation risk premium was high.

And then we got to this period, let's say in 2010 or so, when we had very stable inflation, very little inflation uncertainty and no inflation risk premium.

So I think like all of those things may go together, but I'm sort of saying that there can be a double whammy effect.

Like if inflation expectations get de-anchored, we'd get both the expectations channel and the risk premium channel on top of that double effect.

That's the scary thought.

Therefore, term premium would also rise in that scenario.

mainly various long-short strategies.

So it could be trend following, macro investing, which actually are among the favorites, but also various stock selection strategies.

These are all kinds of hedge fund strategies, but it doesn't really stop there.

There would be also commodities and some other things, but I think that menu is already...

already pretty good.

And more and more, these things are captured through some multi-strategy farms then, whether it's discretionary ones or systematic ones.

I do think that finance has had great tailwinds in recent decades.

I expect that it's going to be a relatively good place, but I would say that the best suggestion is don't make AI your enemy, make it your friend and be part of it so that you can be among the users who can benefit from the technology.

ever greater AI influence on all of us.

Thank you.

His world, as you say, collapsed around him.