Goldman Sachs says current levels of artificial intelligence investment remain manageable and well below past major technology cycles, even as expectations for long-term productivity gains continue to build.
In a note to clients, the bank said AI-related capital expenditure accounts for less than 1% of U.S. GDP — far smaller than the 2–5% seen during earlier transformative tech booms such as the dot-com era or electrification.
Goldman estimates AI-driven productivity could generate an $8 trillion present-discounted value in additional capital revenue for the U.S. economy, with potential outcomes ranging from $5 trillion to as high as $19 trillion. Those gains, the bank argues, would far exceed cumulative AI investment forecasts, even before considering cross-border profits, new profit pools, or breakthroughs toward artificial general intelligence (AGI).
The analysis comes amid market debate over whether soaring AI spending could overheat capex cycles or lead to a future bubble. Goldman’s view suggests that while valuations in the sector are elevated, the scale of investment remains proportionate to the long-term economic upside.
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Goldman’s analysis supports a bullish long-term outlook for AI-related equities, suggesting current spending levels pose little macro risk. The bank’s trillion-dollar productivity forecast could reinforce optimism in semiconductor, cloud, and infrastructure sectors.
Contrarian stuff from GS?
This article was written by Eamonn Sheridan at investinglive.com.
Barclays expects U.S. economic growth to average around 2% quarter-on-quarter between the third quarter of 2025 and the third quarter of 2026, reflecting a steady but moderating expansion as fiscal stimulus fades and trade headwinds persist.
The bank said recently imposed tariffs will act as a “slow burn” on activity, with most firms expected to pass on higher import costs gradually rather than in an immediate price surge. That could cushion near-term inflation readings but prolong pressure on corporate margins.
Barclays also warned that the main downside risks to its outlook stem from softer consumer spending and a potential uptick in unemployment, which could weigh on confidence and discretionary demand heading into 2026.
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Barclays’ tempered 2% growth forecast supports expectations of a soft landing and steady Fed policy in 2026. The bank’s warning on consumer fatigue and unemployment could dampen equity optimism if labour data weakens further.
This article was written by Eamonn Sheridan at investinglive.com.
The Trump administration is preparing to cut more than 10,000 federal jobs during the ongoing government shutdown, White House budget director Russell Vought said.
CNBC with the info.
Vought said the goal is to “shutter the bureaucracy,” targeting agencies and programs viewed as unnecessary. Layoff notices, known as reduction-in-force (RIF) letters, have already been sent to thousands of government employees, with more expected.
Vought also said he intends to shut down the Consumer Financial Protection Bureau within “two or three months,” arguing the agency has been politically weaponized. Other potential targets include Department of Energy climate programs, environmental justice efforts at the EPA, and the Commerce Department’s Minority Business Development Agency.
Shortly after his comments, a federal judge issued a temporary restraining order halting the layoffs, ruling the actions violated federal law. The shutdown, now entering its third week, has left federal employees unpaid, while President Trump ordered continued pay for active-duty military through remaining Defense Department funds.
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The plan to slash federal jobs underscores Trump’s aggressive cost-cutting stance, heightening political uncertainty and risking slower government services. Markets may interpret the move as both fiscally deflationary and politically destabilizing.
This article was written by Eamonn Sheridan at investinglive.com.
NZ FP +0.3% m/m in September 2025
Kiwi is little changed. Circa 0.5720.
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The New Zealand Food Price Index (FPI) is a measure of the changes in the average price of food items sold in New Zealand.
This article was written by Eamonn Sheridan at investinglive.com.
IMF urges Bank of Japan to move very gradually with rate hikes
BOJ must keep monetary policy loose amid trade uncertainty
IMF’s Choueiri says growth risks skewed to downside
BOJ not behind the curve on inflation risk
Any fiscal spending plan must be temporary and targeted
The IMF has urged the Bank of Japan to maintain an accommodative stance and raise interest rates only very gradually, citing persistent uncertainty over global trade and domestic wage growth. IMF Asia-Pacific deputy director Nada Choueiri said Japan’s economy has held up well thanks to exports and consumption, but growth risks remain tilted to the downside. She added that the BOJ is not behind the curve on inflation, with price pressures balanced and no signs of overheating. Choueiri also warned that any fiscal stimulus from Japan’s new government should be temporary and targeted, given the country’s heavy debt load.
This article was written by Eamonn Sheridan at investinglive.com.
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