This article is compiled from a video interview between Anthony Pompliano and Jordi Visser, a macro strategy investment expert with 30 years of experience on Wall Street, who provides a unique perspective on the current economic situation. In the interview, Jordi discusses hot topics such as inflation, the stock market, Bitcoin, AI, and why the market always moves against mainstream expectations.
ChianCatcher has compiled the content.
TL&DR
The traditional economics textbook definition of “recession” has lost its explanatory power in the context of contemporary economic structures. The market is beginning to see Bitcoin as an integral part of its asset allocation.
Currency depreciation is inevitable.
Autonomous, independent, and retail investors are the true dominant forces in the market.
” The essence of “Fed puts” is perpetual currency devaluation
The core driver of Bitcoin’s price movement is the correlation between the US dollar index and US bond yields
Structural changes in capital flows are far more important to watch than short-term economic fluctuations
Currency repatriation due to tariffs will continue to pressure the US dollar, which in turn will affect the yield curve
The strong performance of the AI industry in Q1 has supported economic indicators. Supported overall economic indicators
Historical experience is becoming less important at a time when AI is growing exponentially
(i) Inflation controversy and data trust crisis
Anthony Pompliano: Markets had worried about tariffs, recession and even the Great Depression, but April data showed that consumption remained strong, prices of some goods were cut, and inflation fell back. The stock market rebounded quickly, so does this mean the alarm is lifted? What do you make of these economic signals?
Jordi Visser: As the tariff issue has eased, the policy path over the past five weeks has become clearer: from a 90-day reprieve from tariffs on Chinese products to a phased-in increase in rates, which is now reasonable overall, mostly holding at 10%, close to the level endorsed by Druckenmiller.
This has led to a more pronounced divergence in economic data: business sentiment (soft data) remains subdued, while “hard data” driven by consumption and AI investment has been solid. While consumption has been impacted by market volatility in the short term, the AI industry has been strong and supportive of the economy.
As a result, the S&P 500 rally is justified. Despite many pessimistic expectations, stocks are up for the year and recession predictions are not coming true. In fact, the traditional definition of recession has become difficult to apply to the current complex and resilient economic structure.
Anthony Pompliano: How do we find credible references to the current economic data, which is becoming clearly politicized? Should we reassess the value of such politicized data in economic analysis?
Jordi Visser: The Bitcoin community is uniquely positioned in the current environment. In the age of social media, people are more likely to be exposed to information that appeals to their point of view, and many macro analysts attract attention by talking down the market. Bitcoin holders, on the other hand, have developed the ability to question authority and think independently because they have not been accepted by the mainstream for so long.
Against the backdrop of accelerating AI, the importance of historical experience is diminishing. For example, analogies to 19th-century tariff policies are now anachronistic; modern information travels extremely fast, and rumors like vacant ports can quickly amplify fears of inflation, making rational judgment more difficult.
The core strength of Bitcoin holders is cognitive humility. The nature of the current macro situation is that there is too much debt for the government to raise taxes or cut spending, so it will eventually have to devalue the currency, which will weaken the value of bonds, but will be good for Bitcoin. The key is to recognize the signals that really matter amidst the noise of social media.
(ii) Bitcoin’s comeback: from fringe asset to market dominator
Anthony Pompliano: Bitcoin holders have the advantage of a “cognitive gap”, recognizing their lack of understanding of traditional finance and therefore being more receptive to the new paradigm. Bitcoin is not an IQ test, it’s a test of cognitive flexibility: the ability to think outside the box and realize that we are in a new economic paradigm.
Today, the shift of capital is accelerating towards the autonomous investor, and it is the autonomous investor, the independent investor, the retail investor, who is the true dominant force in the market. Institutions have capital, but are often trapped in complex strategies, such as hedging operations, which are essentially just arbitrage; while retail investors’ “buy and hold” strategy is simpler and more effective, and has been verified many times in cases such as Tesla, Palantir, and GameStop.
In the context of currency devaluation, the simplest “buy and hold” strategy often trumps sophisticated financial engineering.
Jordi Visser: Wall Street’s long-held “Fed put option” theory is undergoing a fundamental change. Financial crises traditionally form U-shaped bottoms (a slow bottoming out), but today the market is showing an I-shaped straight-line rally (a sharp drop followed by an immediate recovery).
There are two main reasons behind this:
AI reshaped the structure of the economy, the popularity of flexible labor made mass unemployment difficult to occur, and the traditional recessionary model failed; Recession became a policy choice, the government used inflationary policies to hedge against deflationary pressures brought about by technology, and the economy balanced between technological deflation and policy inflation.
The ability of Bitcoin investors to recognize this trend stems from two perceptions:
Understanding that “Fed puts” are essentially constant currency devaluations; and High-frequency trading trains the mind to make calm decisions under pressure like a poker player.
Anthony Pompliano: How do you recognize valid economic signals when the market consensus diverges from the true trend? What are the true leading indicators when authoritative judgment continues to diverge from market reality?
Jordi Visser: I think the stock market will remain volatile this year, but corporate earnings growth and economic fundamentals are stable.
Paul Tudor Jones turned bearish just before the U.S.-China tariffs eased, and Steve Cohen also predicts a 45% probability of recession, and the market may pull back. But be wary: when prominent investors go bearish, they may be trying to steer market sentiment by missing the rally.
I do not think the market will bottom out twice, the reason is that the AI industry’s special financial model: technology giants plan to $ 300 billion in capital expenditure, but this year only need to amortize $ 30 billion, this kind of “revenue front, cost deferred” model, short-term for the S&P 500 to provide profit margins. Similar situation had appeared in the early days of cloud computing and the Internet, the difference is that today’s technology companies have lower debt.
The challenge will only become apparent in the long term (2-3 years from now) when Mag7 companies need to deliver real returns. Sequoia notes that startups are gradually eroding giant market share. The market is expected to come under pressure after hitting new highs, but will not return to lows in the short term.
（iii）The AI revolution: the power to reshape the rules of the economy
Anthony Pompliano: When AI startups dare to challenge industry giants, aren’t these “rivals’ choices” the strongest endorsement of value?
Jordi Visser: Based on Stripe’s most recent data, AI programming tools like Cursor have realized $300 million in annual recurring revenue, and along with innovations like Replit and Windsurf, are driving a structural change in the software development paradigm.
While AI is not yet able to replace the top 2% of programmers, it is already replacing 80% of basic coding jobs, and that percentage continues to climb.
The impact of technological change can be likened to offensive plays in football: startups only need to break through a few “lines of scrimmage,” while large enterprises are constrained by architecture, inertia, and compliance, which make the transition more costly. This structural difference is the key variable that explains the divergence in the efficiency of digital transformation.
In particular, mid-sized companies (market capitalization of $3-2 billion) face a dilemma: they lack the flexibility of start-ups, but also have difficulty enjoying the advantages of scale, and 63% of them are burdened by floating-rate debt, which is under pressure in an environment where inflation remains at 3.2%. This “middle tier dilemma” highlights the structural costs of the technology revolution.
Looking forward to 2024-2029, S&P 500 companies will face a head-on impact from emerging technology companies. Will these disruptors follow the traditional IPO route? Entrepreneurs on the front lines are clearly better qualified to answer this question than old-school economists on paper.
Anthony Pompliano: Against the backdrop of accelerating productivity releases, is there still a basis for being bearish on assets over the next three years? Is market pessimism, really, still valid?
Jordi Visser: Market historian Russell Napier points out that more than short-term economic volatility, changes in the structure of capital flows are really key. Tariff policies driving the repatriation of dollars will continue to weigh on the dollar, which in turn will affect the yield curve.
In the new AI-driven economic landscape, the stock market is characterized by two main features: the top 10% of the population contributes half of the consumption, overlaid on huge assets and transfers, and the resilience of consumption; at the same time, $300 billion of AI spending pushes up profit margins and leads to infrastructure investment. Traditional recession warning models are failing.
While some SMEs are under pressure, the overall market is more likely to move sideways than sharply down, with the biggest risk being failing to beat inflation. In this technology-driven era, ignoring the productivity changes brought about by AI could miss important investment opportunities.
(iv) Debt, interest rates and the logic of risk aversion in bitcoin
Anthony Pompliano: Why is it that Bitcoin is always the first to complete a price correction before the geopolitical situation is fully clarified?
Jordi Visser: Institutional adoption of bitcoin is accelerating in the current economic policy environment. Sovereign wealth funds and government agencies continue to increase their holdings, and people are finally starting to see it as a necessary part of their asset allocation because of its unique value due to its low correlation with traditional assets. Bitcoin has shown resilience during market declines and has been the first to rally ahead of the stock market rally.
However, the second half of the year may face the risk of interest rate upside from the debt deficit issue. 30-year Treasury yields are approaching 20-year highs, which is directly related to the return of capital from Asia and the deterioration of the U.S. fiscal situation. Equity-bond correlations could shift when the 10-year Treasury yield breaks out of the 4.8%-4.85% range. Pension funds, which are already well-funded due to rising rates, may increase their bond allocations, which in turn will continue to push up long-term rates.
Anthony Pompliano: What level do you think the 10-year U.S. bond yield needs to reach? In terms of the overall policy and economic picture, should this be capped at less than 4%, or even lower? What is the true standard of yield that represents “policy success”?
Jordi Visser: The core driver of Bitcoin price action is the correlation between the US Dollar Index and US bond yields. Currently the market is structurally divergent: despite the continued rebound in US stocks, the US dollar index has narrowed its range, while the federal funds rate has remained high. This divergence is difficult to sustain in the long run.
With interest rates rising further, default rates on US consumer credit and home mortgages have climbed to cycle highs. Against this backdrop, policymakers may be forced to introduce a housing market bailout. While direct quantitative easing is less likely, the introduction of targeted liquidity support measures similar to those in the Silicon Valley Bank episode cannot be ruled out.
In the new economic paradigm driven by AI technology, the impact of rising interest rates on the tech sector shows significant divergence. Head tech companies Mag7 (specifically the seven tech giants such as Microsoft, Apple, Nvidia, etc.) are largely immune to financing cost pressures, and companies in the AI space are showing strong earnings resilience. This structural difference provides the basis for a potential bitcoin short roll.
Anthony Pompliano: Higher interest rates are likely to provide a greater competitive advantage for AI companies, but their competitors face a higher cost of capital.
Jordi Visser: The current economy shows a structural divide, with corporate bankruptcies alongside startup growth. While traditional companies are forced to exit due to rising financing costs, AI startups are rising rapidly, reflecting increased efficiency in resource allocation. But whether this transition is healthy or not still requires vigilance against potential structural risks.
The key is judgment: is this a benign market self-regulation, or is there a hidden systemic crisis? Whether the decline of traditional industries can match the pace of growth of emerging industries will determine the sustainability of this round of transformation.
(V) Creative Destruction: The Law of Survival in the Age of AI
Anthony Pompliano: How to judge the quality of the current economic adjustment? Are the resources of the eliminated firms efficiently transferred to the more innovative and efficient emerging firms?
Jordi Visser: At the micro level, it is true that business closures cause social costs such as job losses and disruption of household income; however, in terms of the macroeconomic operating mechanism, this process of survival of the fittest is akin to the organizational optimization of enterprises, which is a necessary way of maintaining market vitality and promoting industrial upgrading. This is essentially what a recession is supposed to be; creative destruction is taking place.
Career disruption can also be an opportunity for skills upgrading. Last year I made a career change when I chose to start my own business after the closure of my hedge fund and moved into AI learning and Python programming. This shows that with time commitment, even at age 58, continuous learning can break the age limit and open up new career paths. For job seekers, mastering AI skills will significantly improve competitiveness.
Anthony Pompliano: The Trump team has decimated the Middle East with trillions of investment promises, which are not short-term deliveries, but the U.S. is still seen as an open market against a backdrop of tax hikes. Do these countries see the U.S. as a partner or a rival? Does this perception matter for economic development?
Jordi Visser: Any staged release of investment attraction data should be viewed with caution. The U.S. net international investment position has reached minus $27 trillion, a verifiable figure that suggests deep global capital involvement. If the dollar continues to depreciate, there is a systemic risk of impairment of productive U.S. assets held abroad.
The lack of effective solutions to the current debt and fiscal deficit problems, the dollar’s weakness will show progressive characteristics. The Federal Reserve has not restarted quantitative easing, but only 5 billion U.S. dollars per week to reduce the size of the maturity of the bond reinvestment, this “nominal tightening” policy and Asian and European investors to gradually reduce their holdings of U.S. debt strategy with the inherent consistency of the maturity of the funds may not be fully reinvested.
More noteworthy is the globalization of the AI industry competition pattern. U.S. startups are facing a global technology advantage to catch up, European developers are fully capable of developing Cursor, Replit similar products. If Mag7’s market position is shaken, the global income redistribution will trigger a reconfiguration of the capital flow pattern, this structural change is far more strategic than the scale of short-term capital attraction.
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