Rubber Meets The Road Economics: Exploring the forces shaping our economy

Investor Hunter Craig sits down with Professor Edwin T. Burton of the University of Virginia on Fed meeting day — March 17, 2026. The Federal Reserve is expected to hold rates steady, and Professor Burton explains why there is no path to lower rates without triggering inflation. From there, the conversation ranges across the Iran war’s muted effect on oil markets, a dangerously weakening U.S. economy, and the deep structural vulnerabilities in both public equities and private credit. The episode’s sharpest analysis targets the Magnificent Seven: Professor Burton argues that most of the AI capital expenditure being capitalized on balance sheets should actually be expensed as a cost of doing business — which would reveal that earnings for the S&P’s biggest names are flat or falling. He closes with a warning about private credit run risk, the structural problem facing firms like Blue Owl and Blackstone, and why retail investors in private credit funds may not understand what they actually own.   DISCLAIMER The content of this podcast is for informational and educational purposes only. Nothing discussed in this episode constitutes financial, investment, legal, or tax advice. The views and opinions expressed are those of the host and guest and do not represent the positions of the University of Virginia or any other institution. Past performance is not indicative of future results. Investing involves risk, including the possible loss of principal. Listeners should consult a qualified financial advisor before making any investment decisions. Statistical figures cited during the episode reflect the guest’s characterizations at the time of recording and may differ from independently verified data; see the market data table in these show notes for fact-checked figures.   Key Market Data (as of March 17, 2026) Indicator Value 2-Month U.S. Treasury Yield 3.69% 10-Year U.S. Treasury Yield 4.20% Fed Funds Target Rate 3.50– 3.75% Mortgage Rates (30-yr est.) ~6.30– 6.40% Brent Crude Oil ~$102/bbl (briefly $120) Q4 2025 GDP (annualized) 0.7% (revised down) S&P 500 Change Since Iran War Began (approx.) -1 to -2% OpenAI Projected Loss (2026) ~$14 billion (note: Prof. Burton cited $80B in episode; verified figure is ~$14B for 2026)   Timestamped Topic Guide Timestamp Topic 00:00 Intro — Hunter and Professor Burton set the stage on Fed meeting day 00:45 Fed Prediction: rates hold; no cut possible; Walsh confirmation and what it means 02:00 Mortgage rates at 6.30–6.40%; debt market saturated at every level 02:45 Iran war and oil: why $120/bbl Brent matters less than it once did 04:00 Oil as an economic tax, not an inflation driver; U.S. now a service economy 04:45 Q4 GDP revised to 0.7%; employment weakening; recession risk rising 05:30 Stock market’s puzzling calm: barely -1 to -2% since Iran war began 06:00 Magnificent Seven and the AI capex accounting problem 07:30 Should AI data center spend be expensed, not capitalized? Burton says yes. 08:00 Meta: full-year 2025 capex ($72B) exceeded net income ($60B); cash flow under pressure 08:30 The AI moat problem: 47 free competitors; OpenAI’s mounting losses and cash burn 10:00 Why rates won’t fall: deficits, debt auctions, political gridlock 11:00 Deficits grow in recession; neither party has a credible spending plan 12:30 Can the U.S. afford the Iran war? Political coalition fracturing 13:30 Fed’s real power: printing money vs. market forces; inflation risk of cutting 15:00 Private credit: the retail investor misunderstanding and run risk 16:30 Blue Owl and Blackstone: why headlines matter more than contract terms 19:00 Private equity continuation funds; software company hangover 20:30 University endowments: Princeton at 4%/yr while markets return 20% 21:30 Bearish wrap-up: economy, stocks, politics all pointing down 22:00 Professor Burton’s self-aware caveat: “I do have a tendency to be bearish”  

Edwin T. Burton, UVA economics professor and monetary policy expert, breaks down AI mania and market froth. He discusses why AI sparked software sell-offs, where AI actually boosts productivity, and which firms might lose ground. He also covers the falling dollar, using AI to predict Fed moves, and how soaring national debt and healthcare costs shape future rates.

Hunter Craig sits down with Professor Edwin T. Burton of the University of Virginia to break down the most pressing economic issues of the moment: the Federal Reserve’s upcoming meeting, the meaning behind falling short-term rates and stubborn long-term rates, the fragility of today’s housing market, and whether the U.S. has already slipped into a debt spiral. Professor Burton also uncovers what’s really happening with global currency dynamics, the potential end of the current tariff regime, and the likely trajectory of inflation in 2026. The episode closes with a frank look at artificial intelligence — what AI is genuinely good at, what’s overpromised, and whether the massive capital pouring into AI represents a bubble. If you’re trying to understand inflation, interest rates, tariffs, national debt, or how AI fits into the bigger economic picture, this episode offers rare clarity. Episode Breakdown The Fed’s Next Move Why falling two-month Treasury yields reveal the Fed’s likely rate decision How recent money-supply actions signal a shift in policy Why mortgage rates remain elevated despite easing in short-term yields Housing Market Pressures Why supply remains artificially constrained When homeowners may begin listing again Expectation for national home-price behavior over the next few years The U.S. Debt Spiral Why both spending and taxation have reached political limits How U.S. debt compares to historical sustainability thresholds Why entitlement structures create long-term structural pressure Global Currency and Trade Dynamics The declining share of global payments conducted in dollars How tariffs have strained relationships with European and Asian partners Why political and legal pressures may force a shift in U.S. tariff policy Artificial Intelligence: Hype and Reality What AI is truly good at — and where its abilities plateau Why AI won’t replace scientific intuition or discovery How overinvestment could trigger the next tech-sector correction Whether the S&P 500 would look dramatically different without AI enthusiasm Investor Takeaways Why staying in broad index funds remains a sound long-run strategy What rising consumer weakness means for the next two years How to think about volatility ahead Professor Edwin T. Burton has been a cornerstone of the University of Virginia’s Department of Economics since 1988, where he has taught more third- and fourth-year students than anyone in the department’s history. A graduate of Rice University and Northwestern University, he brings both academic rigor and real-world fluency to the study of financial markets, behavioral finance, and monetary policy. Widely known for making complex economic ideas accessible, Professor Burton’s classes at UVA have launched generations of students into careers in finance, analytics, and policy. His dedication to mentorship runs so deep that the department’s undergraduate career office was renamed the Edwin T. Burton Economics Career Office in his honor — a testament to the impact he’s had on thousands of young economists. Beyond the classroom, Professor Burton is a sought-after commentator on issues like inflation, tariffs, and global debt dynamics, helping audiences understand how large-scale economic forces shape everyday financial realities. His mix of clarity, candor, and grounded insight makes him a trusted guide through the noise of economic news — and an ideal guest for conversations that ask what today’s headlines really mean for investors.   Disclaimer The information provided on this podcast is for educational and informational purposes only. It is not intended as financial advice and should not be relied upon as such. All opinions expressed by the hosts, guests, or participants are solely their own and do not reflect the views of any companies or organizations they may be affiliated with. We recommend that you consult with a qualified financial professional before making any financial decisions. Remember, investing and financial decisions carry risks, and it is important to do your own research.

In this episode, investor Hunter Craig sits down with Professor Edwin T. Burton of the University of Virginia to discuss the upcoming Federal Reserve meeting, its implications for interest rates, and what the Fed can — and can’t — control. Professor Burton offers his signature mix of sharp humor and deep economic insight as he unpacks the paradox of record-breaking stock markets amid mass layoffs, explores historical lessons from the 1929 crash, and shares his contrarian view on U.S.–China trade. Episode Breakdown 00:00–02:30 – The Federal Reserve’s Next Move Professor Burton predicts a 25-basis-point rate cut and explains why the Fed is often following — not leading — the market. 02:30–06:30 – The Stock Market Paradox While the economy remains weak for many Americans, the S&P 500 keeps setting records. Burton explains how a handful of tech giants are driving the illusion of prosperity. 06:30–11:30 – Lessons from 1929 Burton takes us back to the Great Depression, connecting historical monetary mistakes with today’s overexpansion of the money supply. 11:30–21:00 – Tariffs and China A candid, controversial take: Burton argues that tariffs weaken American competitiveness and that trade with China is beneficial for both economies. 21:00–24:00 – Predictions and Final Thoughts Hunter tests Burton’s track record on Federal Reserve predictions — and hears a hilarious confession about Burton’s stock-picking history. Guest Bio Professor Edwin T. Burton is a Professor of Economics at the University of Virginia, known for his expertise in financial markets, monetary policy, and behavioral finance. He is a sought-after commentator on the Federal Reserve, market trends, and U.S. fiscal policy. With a distinguished academic and professional background, Professor Burton blends academic rigor with real-world insight in every conversation. Connect with the Show Email: rubbermeetstheroadeconomicspod@gmail.com Subscribe wherever you get your podcasts to stay updated on the latest economic insights. Disclaimer: The information provided on this podcast is for educational and informational purposes only. It is not intended as financial advice and should not be relied upon as such. All opinions expressed by the hosts, guests, or participants are solely their own and do not reflect the views of any companies or organizations they may be affiliated with. We recommend that you consult with a qualified financial professional before making any financial decisions. Remember, investing and financial decisions carry risks, and it is important to do your own research.   Produced by Awkward Sage Media.

In this episode of Rubber Meets the Road Economics, investor Hunter Craig sits down with Professor Edwin T. Burton from the University of Virginia to break down the economic realities behind the AI boom. While tech companies are pouring billions into artificial intelligence, the rest of the economy is slowing — a trend masked by massive capital expenditures in data centers, chips, and defensive spending. Professor Burton explores whether AI is truly creating value or simply inflating numbers, what hidden distress can be found in recent bankruptcies, and how high interest rates and chaotic tariff policies are reshaping business realities. They also discuss the Fed’s upcoming decisions, the power of the repo market, and why inflation may be sticking around longer than policymakers hope. Episode Highlights The U.S. economy is weakening, except for the AI sector. Much of AI investment is “defensive” spending, not innovation. Inflated earnings depend on AI capitalization that may not be sustainable. Tariff unpredictability is wreaking havoc on global trade. The repo market, not the Fed funds rate, determines real monetary movement. Stagflation may already be here — inflation persists even as growth slows. Europe faces similar challenges as France struggles with deficits. The global economy continues to depend heavily on U.S. dollar dominance. Guest Bio Professor Edwin T. Burton is a distinguished economist, investor, and professor at the University of Virginia. His work bridges academic insight and real-world market behavior, with deep expertise in monetary policy, investment strategy, and financial market structure. Professor Burton is known for his clear, candid approach to explaining complex economic issues — and for being unafraid to question the consensus. Relevant Links University of Virginia Department of Economics: https://economics.virginia.edu Federal Reserve Meeting Calendar: federalreserve.gov Disclaimer The information provided on this podcast is for educational and informational purposes only. It is not intended as financial advice and should not be relied upon as such. All opinions expressed by the hosts, guests, or participants are solely their own and do not reflect the views of any companies or organizations they may be affiliated with. We recommend that you consult with a qualified financial professional before making any financial decisions. Remember, investing and financial decisions carry risks, and it is important to do your own research.

Investor Hunter Craig sits down with University of Virginia economist Professor Edwin Burton to break down the latest economic signals as the Federal Reserve heads into a pivotal meeting. With the S&P 500 topping 6,600 and Treasury yields hovering around 4%, the professor explains why he expects a 25-basis-point rate cut—and why a 50-point cut would create messy arbitrage opportunities. They also cover: The Fed’s balance-sheet strategy and how selling Treasuries actually raises rates Slow U.S. GDP growth (1.3% annualized for the first half of 2025) and what it means for small businesses Why declining consumer spending and speculative investment trends point toward a possible recession The reality behind crypto and AI hype—and why valuations may tumble Warren Buffett’s “five-minute fix” for the national deficit and why it may be too late Professor Burton offers a candid view of the U.S. economy’s next moves and why caution may be the smartest investment. Guest Bio Professor Edwin T. Burton is a renowned economist and long-time faculty member at the University of Virginia. Known for his clear, incisive analysis of markets and monetary policy, Professor Burton has authored influential works on interest rates and investment strategy and is a frequent commentator on national economic issues. Disclaimer The information provided on this podcast is for educational and informational purposes only. It is not intended as financial advice and should not be relied upon as such. All opinions expressed by the hosts, guests, or participants are solely their own and do not reflect the views of any companies or organizations they may be affiliated with. We recommend that you consult with a qualified financial professional before making any financial decisions. Remember, investing and financial decisions carry risks, and it is important to do your own research.

In this Labor Day conversation, investor Hunter Craig and University of Virginia economist Professor Edwin Burton break down the latest forces shaping the U.S. economy. With the September 17 Federal Reserve meeting looming, the discussion covers where rates are headed, the real limits of Fed power, and the political tug-of-war over central bank independence.   Professor Burton also shares sharp insights into America’s mounting deficit, the shaky ground under AI-driven capital expenditures, and why tariffs act more like a sales tax than a growth policy. From inflation trends to Warren Buffett’s blunt solution for Congress, this episode delivers clarity on issues that impact us all.   Key Topics: Why the Fed is likely to cut rates by 25 basis points at the September 17 meeting The misunderstood limits of Federal Reserve power and its reluctance to overuse the balance sheet Central bank “independence”: myth, politics, and global cautionary tales U.S. consumption and investment spending — and what they signal for growth The AI capital boom: Porsche-level hype or Honda-level utility? Why today’s equity valuations echo dot-com era bubbles Tariffs as sales taxes and their hidden cost to American households Why the U.S. deficit cannot be solved by “growing our way out” Warren Buffett’s simple (but unlikely) fix for Congressional overspending   Guest Bio: Professor Edwin T. Burton is Professor of Economics at the University of Virginia and a former partner at Rothschild, Inc. He has also served on the faculties of Cornell, Princeton, and the University of Chicago. His expertise spans financial markets, the Federal Reserve, and economic policy.   Disclaimer: The information provided on this podcast is for educational and informational purposes only. It is not intended as financial advice and should not be relied upon as such. All opinions expressed by the hosts, guests, or participants are solely their own and do not reflect the views of any companies or organizations they may be affiliated with. We recommend that you consult with a qualified financial professional before making any financial decisions. Remember, investing and financial decisions carry risks, and it is important to do your own research.

In this sobering and thought-provoking episode, investor Hunter Craig sits down with Professor Edwin Burton of the University of Virginia to unpack the harsh economic realities we face as the national debt approaches $40 trillion. Together, they cover everything from university research incentives to runaway entitlement spending, inflation, and the limits of Federal Reserve intervention. With a mix of wit, clarity, and no-nonsense economic insight, Professor Burton breaks down the problems that no one in politics seems willing to fix—and offers practical advice for protecting your financial future. In This Episode: How university funding and research grants may be contributing to economic waste The misaligned incentives behind academic research and tenure Why inflation may be the only solution politicians turn to The real drivers of federal debt: Medicare, Medicaid, and Social Security Professor Burton’s unfiltered take on healthcare spending and political stalemates Market outlook for the second half of 2025 and why the S&P might not reflect reality Strategies for surviving inflation and preserving wealth through hard assets Guest Bio: Professor Edwin T. Burton is an emeritus professor of economics at the University of Virginia. Over the course of his 50+ year academic career, he has taught at multiple universities and is known for his deep expertise in finance, macroeconomics, and public policy. His insights cut through the noise to provide clear-eyed perspectives on America’s most urgent economic challenges. Call to Action: Liked what you heard? Subscribe to Rubber Meets the Road Economics and share this episode with someone who wants to understand the real drivers of our economy. For questions or comments, email us at rubbermeetstheroadeconomicspod@gmail.com. Disclaimer: The information provided on this podcast is for educational and informational purposes only. It is not intended as financial advice and should not be relied upon as such. All opinions expressed by the hosts, guests, or participants are solely their own and do not reflect the views of any companies or organizations they may be affiliated with. We recommend that you consult with a qualified financial professional before making any financial decisions. Remember, investing and financial decisions carry risks, and it is important to do your own research.

In this episode of Rubber Meets the Road Economics, Hunter Craig sits down with Professor Edwin T. Burton to unpack one of the most pressing economic topics of our time: tariffs. With political posturing, trade wars, and rising costs dominating the headlines, Professor Burton breaks down why tariffs are effectively a regressive sales tax that hits consumers the hardest — especially those with lower incomes. The conversation doesn’t stop at trade. Professor Burton also dissects recent inflation data, challenges the Fed’s narrative on expected inflation, and explains why the central bank’s actions don’t always align with market reality. From the politics of trade policy to the mechanics of interest rates and monetary supply, this is a conversation rich with insight and sharp critique. In This Episode Why tariffs act like a national sales tax—and who really pays for them How proposed tariffs are impacting U.S. allies and trading partners Why the narrative that “China pays” for tariffs is economically incorrect What inflation data is really telling us (hint: it’s not what the media says) The flaw in the Fed’s reliance on “expected inflation” What the money supply reveals about real inflation drivers Why interest rates aren’t as controlled by the Fed as many think Professor Burton’s take on Powell’s leadership and policy timing What historical examples teach us about inflation and money printing Guest Bio Professor Edwin T. Burton is a renowned economist and professor emeritus at the University of Virginia. With decades of experience in academia, finance, and government policy, Professor Burton is known for his candid, data-driven perspective on fiscal and monetary policy. His work often challenges conventional narratives and focuses on the deeper forces shaping the global economy. Key Links Learn more about Professor Edwin T. Burton: University of Virginia Faculty Page  Connect with the show: Email us at rubbermeetstheroadeconomicspod@gmail.com Financial Disclaimer Disclaimer: The information provided on this podcast is for educational and informational purposes only. It is not intended as financial advice and should not be relied upon as such. All opinions expressed by the hosts, guests, or participants are solely their own and do not reflect the views of any companies or organizations they may be affiliated with. We recommend that you consult with a qualified financial professional before making any financial decisions. Remember, investing and financial decisions carry risks, and it is important to do your own research.

As the S&P 500 hits record highs and inflation cools, you might think the U.S. economy is cruising. But Professor Edwin T. Burton returns to Rubber Meets the Road Economics with a more sobering take: the real warning signs are hiding in plain sight. In this episode, Professor Burton explains why the yield on the two-month Treasury is a more reliable predictor of Fed action than market sentiment—and why he thinks the economy may be heading toward a recession. He breaks down the pressures on U.S. debt markets, explains how AI might shift the labor force, and makes a compelling case for watching the Federal Reserve’s balance sheet, not just their statements. If you want to understand what’s coming in the second half of 2025, this episode is essential listening.   Episode Breakdown: Why inflation may already be “last year’s story” What the 2-month Treasury yield reveals about the Fed’s next move How foreign investors are retreating from U.S. debt—and why that matters Why interest rates may stay high, even in a recession The limits of artificial intelligence as an economic fix Arbitrage explained: how institutional players respond to Fed policy Predictions for Q3 and Q4 2025: weak consumer spending, fragile housing, persistent debt pressure How to think critically about AI’s impact on jobs, investment, and productivity   Guest Bio: Professor Edwin T. Burton is Professor of Economics at the University of Virginia, where he has taught for nearly four decades. A respected voice in both academic and financial circles, Burton’s career spans roles as a Wall Street economist, a financial strategist, and a sought-after commentator on monetary policy. He is known for his clear, no-nonsense analysis of complex economic systems and his ability to connect high-level financial trends to everyday realities.    Call to Action: Like what you heard? Be sure to subscribe and leave a review wherever you get your podcasts. For listener questions or topic suggestions, email us at: rubbermeetstheroadeconomicspod@gmail.com.   Disclaimer: The information provided on this podcast is for educational and informational purposes only. It is not intended as financial advice and should not be relied upon as such. All opinions expressed by the hosts, guests, or participants are solely their own and do not reflect the views of any companies or organizations they may be affiliated with. We recommend that you consult with a qualified financial professional before making any financial decisions. Remember, investing and financial decisions carry risks, and it is important to do your own research.