Here's The Latest Outlook From Lacy Hunt, Lyn Alden, James Grant + A Dozen Other Experts

**Adam Taggart** (0:06)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Well, Thoughtful Money's Fall Online Conference was held this past weekend, and I'm delighted to say the event was a real success. That was due primarily to the amazing lineup of speakers who presented, and then took live audience Q&A throughout the insight-packed 11-hour day. For those of you who didn't attend, I thought you'd enjoy hearing some of the conference highlights. Now, the day started with Lacy Hunt, former Senior Economist to the Federal Reserve, explaining how a perfect storm of converging trends is hampering economic growth, making a recession next year hard to avoid.

**Lacy Hunt** (0:46)
The combined effects of falling capacity utilization domestically and globally, the inherently deflationary nature of artificial intelligence, the determined program of monetary restraint by the Federal Reserve, and the liquidity draining effects of higher tariffs, suggest to me that the economic outlook will be very challenging, and that these headwinds will impede economic growth through this year into 2026, and longer unless the policy variables change in a very critical way.

**Adam Taggart** (1:38)
Stephanie Pomboy and Grant Williams then gave their macro outlooks, remarking that over their careers, they find today's environment a very scary one for long-term investors.

**Grant Williams** (1:49)
Oh, I mean, I honestly don't know. Maybe they're right. Maybe they're right. And, you know, as Chuck Prince said, you've got to keep dancing while the music's playing and all that kind of stuff. But if you're in any way forward-looking and you're trying to prepare yourself for what's coming rather than invest for the here and now, you have to be taking this stuff seriously. You have to be because the liabilities that you're looking at here just don't work out. They just don't. And to your point, if you end up with a few... Let's say we split the difference between the 6% and the 9%. You end up with a 13.5% budget deficit. And the CBO is already forecasting out to 2030, I think, that 6% is as good as it's going to get. It's more like it's going to be 7%, 8%.
I mean, I don't know what to say. I mean, yes, you can hold your nose. And yes, you can dabble around in markets. And there are plenty of things that you can play with to make a bit of money. But if you are actually investing capital for the long term, and that's really what we're talking here, because if you want to speculate, you can speculate in anything, any day, at any hour. If you're trying to invest capital for the long term, this is a really, really scary environment to try and do that.

**Adam Taggart** (3:12)
Grant and Stephanie were followed up by Michael Howell, who showed how the liquidity that bolstered the impressive GDP growth and double-digit market returns of the past three years is now swiftly drying up.

**Michael Howell** (3:25)
What it says is that that cycle bottomed in October of 2022 It is slated to peak, as you rightly say, on the sine wave, sometime around late 2025, early 26 You can see the beginnings of an inflection in the latest data, and the large or the major reason why you saw an inflection in the September data comes back to what the Federal Reserve was doing, or what we should say is what the Federal Reserve was not doing, in other words, injecting more liquidity. The Fed seems to have stepped back from the process. Now, what does this mean in terms of asset allocation? Let me see if I can show that.

**Adam Taggart** (4:07)
Darius Dale offered a countering view, the most optimistic market outlook of the day, expecting tailwinds to start helping the economy grow faster next year. That said, he did note that his model is starting to issue some warning signs in the very near term.

**Darius Dale** (4:22)
So, in terms of answering the question, still incredibly bullish. We authored our Paradigm Sea theme back in April, which is in shorthand, that's just the government's choice to outgrow the debt and deficit trajectory with the choice of growth and the policies. You know, on the large scale, fiscal easing coming down the pike. In our opinion, there's likely to be large scale monetaries and coming down the pike. In our opinion, there's likely to be substantial deregulation both within and external from the financial sector coming down the pike. And so we've had the ability based on this fundamental framework to help our clients in our global investor community, you know, essentially put on earmuffs throughout, you know, since the early spring and all the way up until now, when they hear the word tariff, which in my opinion, has, you know, caused a lot of investors substantially underperform the market this year.