Top Traders Unplugged

SI399: AI, Inflation and the Portfolio That Refuses to Sit Still ft. Alan Dunne

39 snips
May 9, 2026
Guest
Alan Dunne
Alan Dunne, a systematic investor and trend-following portfolio manager, talks about AI’s distortion of economic data and the clash between AI-driven productivity and energy-driven inflation. He explores shifting rate expectations, fiscal pressures, and why portfolios need to adapt across regimes. The conversation also unveils a new Regime Adaptive Fund built to adjust exposures as markets and correlations change.
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INSIGHT

Both Shocks Increase Fiscal Pressure And Policy Risk

  • Both AI and energy shocks push policymakers toward more fiscal responses, raising the risk of fiscal dominance amid already high global debt.
  • Dunne warns CAPEX for AI and subsidies/military spending after energy shocks both increase fiscal pressure concurrently.
INSIGHT

Monetary Activity And Dispersion Boost Macro Opportunities

  • Macro strategies (and trend) perform better when monetary policy is active and dispersed because rate moves and cross-country cycle differences create tradable volatility.
  • Graham Capital's research shows higher macro alpha in periods with many hikes/cuts and greater policy dispersion across economies.
INSIGHT

Interest Rate Volatility, Not Just Direction, Matters

  • Inflation volatility and large interest-rate moves, not just direction, drive opportunities for macro and trend strategies.
  • Dunne contrasts the muted 2010s (low rates, low inflation volatility) with 1982–1999 where higher rates and declining rates created strong fixed income trends.
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