Nouriel Roubini

So they have no option and they'll have to

essentially spend more on defense, be part of NATO, buy even more American weapons.

And there are going to be two technological stacks that are going to be completely at risk.

Because there's a U.S.

stack and a Chinese stack.

And if you are a friend of the U.S., you don't want to be subject to the spying and being...

within the firewall of China.

So Europe and France and others have no choice.

They have to go with our technology, with our defense, with our own system, with our economic channels.

They'll do some trade with China, but not the stuff that is really sensitive.

They have no option but going with the U.S.

That doesn't bother me as much, and he was at the Fed before, and even Powell has done well while being a lawyer.

I'm more concerned about these views.

The view that you can, because of AI, reduce the Fed funds, or it is wrong.

Because even if AI will eventually reduce inflation, it's going to increase potential growth.

So the equilibrium, real R-star is higher, while the nominal, because of inflation, could be lower.

And it's going to be a wash between the two.

So on one side, real growth implies high real rates.

On the other side, lower inflation implies lower nominal.

And it's a wash between the two.