The Macro Minute with Darius Dale What matters more, uptrending productivity growth or escalating war?
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Mar 5, 2026 They debate whether accelerating productivity from AI or rising geopolitical conflict will steer markets. They cover data pointing to a productivity upswing and the jobless recovery thesis. They discuss inflation risk from energy price spikes tied to Middle East tensions and how that reshapes rate expectations.
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AI Driven Productivity Upswing Boosts Corporate Profits
- Accelerating productivity driven by AI is likely to boost long-term corporate profits and S&P 500 earnings.
- Darius Dale notes current productivity upturn outpaces the 1990s–2000s cycle and is the key driver of corporate profitability in the 42 Macro model.
Energy Price Shock Is Repricing Inflation And Policy
- Rising energy costs from Middle East conflict are prompting a sharp repricing in rates and reducing Fed cut expectations.
- Brent crude stabilized near $84 and money markets cut expected year-end Fed cuts from >60 bps to ~45 bps per Darius Dale.
Productivity Can Beat Inflation Unless Energy Shocks Persist
- Structural productivity gains are a durable disinflationary force, but a sustained energy price shock can overwhelm it.
- Darius frames the conditional: AI diffusion plus jobless recovery implies productivity up, wages down, and muted inflation absent prolonged energy shock.