Cullen Roche on Inflation, AI and Why the Debt Crisis is Overblown

In this episode of Excess Returns, we welcome back Cullen Roche of Discipline Funds for an in-depth conversation on the economy, markets, demographics, AI, and investing frameworks. Cullen cuts through the noise to explain the real forces shaping inflation, interest rates, the role of the Federal Reserve, and why he believes the U.S. faces more disinflationary pressures than inflationary risks. We also dive into his “defined duration” investing framework and preview his upcoming work on portfolio strategies.Topics CoveredWhy fears of a looming debt crisis may be misplacedInflation outlook, tariffs, and the Fed’s “soft landing” challengeThe importance of Fed independence and risks of politicizationImmigration, demographics, and long-term disinflationary trendsHow AI is reshaping productivity, inequality, and the job marketDefined Duration Investing and asset-liability matchingLessons from all-weather strategies and the Permanent PortfolioCullen’s “Forward Cap Portfolio” and future of global marketsTimestamps00:00 – Cullen on debt crisis fears02:32 – State of the U.S. economy post-COVID05:18 – Inflation, tariffs, and shelter costs10:25 – Soft landing vs. rolling recessions14:07 – The Fed’s role and impossible job19:25 – National debt and Ray Dalio’s crisis warning27:52 – AI boom and disinflationary forces31:01 – Immigration, demographics, and inflation37:23 – Aging population and wealth inequality43:00 – How AI impacts productivity and jobs52:00 – Defined Duration Investing explained1:01:34 – Portfolio strategies: Permanent Portfolio & risk parity1:03:54 – Cullen’s “Forward Cap Portfolio”1:06:31 – Closing thoughts and future projects

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