Trade wars, AI tailwinds, and the global economic mosaic

Welcome to Beyond the Benchmark, the EFG podcast with Moz Afzal.

Moz Afzal:
Welcome to Beyond the Benchmark. So today we have again, another very special guest, Torsten Slok from Apollo, and he's a partner and of course the chief economist. Torsten, first time on the pod. Thank you very much for coming on.

Torsten Slok:
Oh, thanks so much honour. Thanks for having me.

Moz Afzal:
Not at all. It's a real pleasure. So given this is the first time you're on, we always want to get a little bit of intro in terms of yourself, also your background, what kind of drives you. Obviously you are an economist at Deutsche Bank for a very long time, so congrats for being there so long, and obviously moving to the buy side was too tempting, but it'd be very interesting to hear your perspectives on that. And of course your background all the way from those great days of university.

Torsten Slok:
Yeah, thanks so much. So I'm originally from lovely Denmark. We moved to the US in 1998, which is now a long time ago. And in Denmark I did a master's degree in economics. I did my PhD in economics. Then I spent a year in the US in Princeton in 95, 96. And there I ran into a professor Mike Bodo, who suggested that I should become a summer intern at the IMF. I was an intern at the IMF and I was so lucky that they offered me a job afterwards. So I started in the IMF EP programme, which is the PhD economics programme for the International Monetary Fund in Washington DC in 1998. First I worked for a year on Mongolia. This was the division with China, Hong Kong and Mongolia. So spent time in January in Lan Patong. We spent time studying and taking heart about China and Hong Kong, and this was in the 1990s, which of course is a long time ago now.

Then I spent time in the World Economic Outlook division, which is called the World Economic Studies Division at the IMF, which writes the WEO, which actually is being published these days during the World Bank Spring meetings. And every six months we will write chapters for the WEO about the hot topics in the global economy. Then I subsequently got a job later on at the OECD in Paris, and after I'd been there for a few years, then I got a job, the Deutsche Bank in New York because one of my managers from the IMF had become the head of research Deutsche Bank. And then I spent 15 years with Deutsche Bank. And then in 2020 I shifted here to Apollo and I've been here for the last five years.

And my job at Apollo is about two things. I spend roughly half my time internally talking to deal teams. So this is talking to deal teams and private credit in private equity and real assets. What are they looking at? Individual investments. What is the macroeconomic backdrop? In some cases the macroeconomic backdrop is very important. In other cases it's less important. And we have a constant debate internally about is the economy getting better? Is economy getting worse? What's going on with inflation? What's going on with tariffs? What's going on with the unemployment rate? At the moment, we don't have government data. So now we look at a lot of private data sources, what's going on in the private data, how many people are going to Broadway shows, how many people go to movie theatres? There's a lot of public data in the private space you can look at and study. And this internal discussion is very important, of course, for the investment decisions that the deal teams are making.

And the other half of my job is talking externally, including to you here today, but also to the press, to investors, to clients, LPs all around the world. So the short answer to your question is I have in my own view the greatest job in the world thinking about macroeconomics, and that's what I've done for my whole life. And most importantly today, how is the macroeconomic outlook linked to what's going on in public markets and how is it linked to what's going on in private markets? And that discussion is constantly updated every day with new data coming in, new things happening, developments in financial markets, and therefore trying to understand what's going on. What is the outlook? Is the Fed going to cut a lot more? Are we having a recession? Are we not having a recession? Is the lot going down? Are interest rates going up? Are we just going up for middle income workers, low income workers? All these things add up to the macroeconomic discussion in markets at the moment. So yes, this is the elevator version of what I do and how I came to being on your podcast today.

Moz Afzal:
So let's go straight into it. Last time I saw you actually happened to be in New York, very lucky to see you in person, and it was springtime and the obliteration day, I guess is what they call it these days was just there and we were right in the storm. And then we had the pivots from Trump and on the tariffs and things started to calm down a bit. Obviously a lot's changed since then. I think you had probabilities, I think most economists at the time had probability of recession as a size 90%. Obviously that changed as the pivot from the Trump and his administration happened. So where are you at in terms of tariff impacts? Because clearly, and you've written quite a lot about this, is things have changed and there are other things starting to alleviate some of the pressure that tariffs themselves bring.

Torsten Slok:
Yeah, this is very, very important. So obviously Liberation Day came along and we all went back to our spreadsheets and came to the conclusion this is going to have a negative impact on growth and it's going to have a positive impact on inflation. Because a trade war is by definition as deflationary impulse, meaning companies including, for example, Walmart have clearly said if we face higher tariffs, which is a different way of saying if you raise taxes on imports, then prices of goods will be going up. That's what Walmart has been saying. And the logical conclusion is that therefore sales of goods will be going down. That's by definition as deflationary impulse. So the conclusion number one was liberation day and a trademark comes along, and therefore we should in the market begin to look at what is the implication of deflationary impulse, where prices are going up and sales and GDP and earnings are going to go down.

Now the key issue of course in this discussion is the following, what is the magnitude of this impulse? If tariffs only go up by half a percent or 1%, of course this is going to completely disappear in the big mix of things. In other words, it will not be showing up in GDP, it'll not be showing up in inflation because the magnitude of the shock is relatively limited. If on the other hand, tariffs on China had turned out to be 145%, that's when we came to the conclusion we would have a complete halt of trade between the US and China. As a result of that. We were saying at the time that we would have with a 90% probability what we called a voluntary trade reset recession. Now later on, Trump of course backed down and the actual level of tariffs ended up being significantly lower.

Even as we speak the news about that there are further reductions in tariffs on things that the US is not producing itself. So the first conclusion is when we look at the outlook for the economy, it becomes really, really important to understand what is the magnitude of the impulse that the economy is hit by? What is the magnitude of the shock that comes along when you have politicians coming in and in this case starting a trade war with higher tariffs? And the answer to that is that the magnitude of the trade war, the magnitude of tariffs, what's substantially lower than what it was when it was announced on liberation day. So that's the first thing. Therefore, the impact on the economy ended up being milder because the shock ended being milder. The two other things that have also been happening, which of course also have been playing an important role, is that we have had an AI boom.

We still have an AI boom that's been very important for data centre construction. That's been very important for energy construction, meaning providing energy to the data centres. And it's also been very important for consumption through the wealth effect. As stock prices have gone up, consumers have been spending more money. So this has also been providing a boost while at the same time there was a drag on the economy from higher tariffs, there was a boost that was offsetting the drag from the trade wall, from the AI boom that we've seen in the data centre buildup, in the energy buildup, and also in the wealth effect for consumers through higher stock prices. And lastly, we have also had a third element named the Industrial Renaissance. The Industrial Renaissance is not only in AI, but that is also the Industrial Renaissance in strategic manufacturing. The administration, Trump had a very clear view that they want to bring home more strategic manufacturing.

They want also to bring home more manufacturing in areas of course, where we need these things so that there's less weight on costs on imports. This has also been a very important boost to the economy, including also manufacturing of defence, including also manufacturing of aerospace, biotech, various areas that are above and beyond what's been happening in ai. So in short, in liberation day, we were seeing the economy being hit by of course, tariffs and the trade war, but that negative impulse to the economy was offset by positive effects coming from the AI build out and from the industrial renaissance. So this is the reason why we did not have the recession that we worried about in the beginning because the shock was smaller and we had some offsetting effects that turned out to be bigger than what I expected at the time. From the AI data centre build out and also from the Industrial Renaissance.

Moz Afzal:
How much do you assign to say oil prices, obviously, because at the same time Trump and the administration have been working very hard to get the oil price down substantially. Have you got a sense of how much of that impact also helped?

Torsten Slok:
That has also helped, and that is in particular, you're absolutely right, more recent development where oil prices have been going down. Normally when you and I, and we have talked about this before, when you begin to see commodity prices go down, you begin to worry about, well, maybe the economy is actually a bit weaker because maybe there is less demand for energy at the moment. But in this environment where you also have had an increase in supply in particular from the us, but also from OPEC plus, then I do think that the decline in oil prices is also a tailwind to the outlook overall. So if we summarise what we have talked about so far, the headwind to the economic outlook is still the trade war. We still have some quarters ahead of us where we worry about downward pressure on GDP, upward pressure on inflation. That's the inflationary impulse being present in the data again, at least until the end of this year and well into next year. So that's a headwind to the economic outlook. Tailwind to the economic outlook is the AI boom tailwind to the economic outlook is the Industrial Renaissance. And you're absolutely right. Another tailwind to the economic outlook is that energy prices have been moving lower.

Moz Afzal:
So what does that mean in terms of when you're putting all this together in terms of interest rate developments, particularly in the US and something that's unusual, I think you and I probably haven't seen this for a very long time, is the ECB seems to be ahead of the interest rate curve rather than behind the interest rate curve i.e. behind the United States is always US acts first. Europeans come later this time around, they seem to be advanced and probably hit trough rates before the US does, which is, I can't remember last time I saw that.

Torsten Slok:
Oh, absolutely. This is very, very unusual. So if I think about what's going on in the US relative to Europe, I think it really is quite simple. In the US, the Trump administration decided to start a trade war with literally all trading partners at once, meaning 90 countries were facing higher tariffs. So therefore you saw prices of goods being imported from all countries in the world go up. So that means that we saw a very significant inflationary impulse that the consensus expects to bring inflation over the next 12 months to 3% for the next literally five quarters. We did not see that in Europe. Think about Germany. Germany is not in a trade war with France, with Italy, with Spain, with Denmark, other countries. Germany is only in a trade war with US. So the consequence of this is that the impulse to inflation in Germany has been much, much milder because it was only goods that were imported from the US that became more expensive, whereas in the US it was goods imported from all countries that became more expensive.

This created this highly unusual situation. Exactly as you're highlighting that there is much more upward pressure on inflation in the US because the US is seeing prices of imports from all trading partners go up at the same time, whereas Germany and France and UK and other countries in Europe of course have not seen the price of imports go up because they were only in a trademark with the US and not with other European and other global trading partners. So the consequence of that for rates is that it's being bought difficult and it continues to be more difficult for the Fed to cut interest rates because we have more upward pressure on inflation in the US than we have in Europe. And that's exactly as you're highlighting in my view, the reason why the outlook for the ECB and the Fed is so different, because it's so hard for the Fed to cut interest rates when there is this upward pressure on inflation coming from imports, taxes or tariffs growing up on all trading partners. Whereas in Europe we've seen inflation come down. So that's why it's very unusual. The outlook for the consensus is that in the us, inflation will go up over the next 12 months, whereas in Europe the outlook is that inflation will go down and that gives the room for ECB to exactly be ahead of the curve relative to the Fed.

Moz Afzal:
So in terms of your interest rate forecasts for the next say six months, I can say 12 months as well, but you and I know that's very difficult to predict, but next six months, what are you thinking about annual rate cuts to come?

Torsten Slok:
Yeah, so this is very important. So for the Fed, we have one cut here in October, but we don't think they will cut in December. And we actually think that the next cut will only be in June. And the reason why we have a more flat outlook for fed cuts meaning fewer fed cuts than what the market is pricing, is that it's simply very, very difficult for the Fed to cut interest rates when inflation is very elevated. Let's just say this in very plain English. If inflation should be two, that is the target for the ECB. That is the target for the federal reserve. If inflation should be two, but today inflation is not two, it is in round numbers three. And if we're going to stay at three, which is the expectation from the consensus, it's actually also the expectation in the fixed forecast that's built in.

It's also our expectation at Apollo, if inflation is going to be three and not two, then it is going to be a challenge for the Federal Reserve to cut interest rates. Yes, I do understand that we get a new fixture on May the 15th next year. So that's why we may get a cut in June of next year. But I would still strongly see this as the challenges that we are simply just not done fighting inflation because there is an inflationary impulse coming in the US from tariffs, and there is also an inflationary impulse in the US coming from the lower dollar. Remember when the dollar goes down, import prices go up, meaning my shirt that I buy in a store in Manhattan, which is imported. Well, if the dollar goes down, then that shirt is going to be more expensive. So that's why the inflationary impulse means that we think that we will only get a cut here in October and then a cut again in June of next year.

For the ECB, there's more room to cut. But this will of course all depend on the outlook overall, not only for inflation, but for the broader outlook for Europe, which of course continues to face a number of headwinds on a number of different fronts, including of course because of the challenge with the US trade war. So the short answer to your question is we only see very limited fed cuts in the US and we do see more room for cutting rates at the ECB simply because the business cycle from an inflation perspective gives more room in Europe to cut interest rates.

Moz Afzal:
So let's move on then to I guess reasons why the Fed might cut or cut more than your expectations. Obviously we've seen the First Brand situation. We've seen some of the regional banks talk about losses on their loan books. We've seen credit card delinquencies pick up student loans. Of course, now that Trump is in power, they don't get away with it lightly and car loans. So they've clearly picked up. What is your path now for those? Do they still stay elevated? Do they start to roll over? Do they need fed cuts to alleviate some of the pressure there?

Torsten Slok:
Yeah, there's two dimensions to this very, very important question. The first is that this is a reminder that in public markets you could buy something that's safe, you could buy investment grade credit or you could buy something that's risky, you could buy high yield, but that is exactly also the case in private markets. In private credit, you can get something that's investment grade, private credit, you can get something that's high yield private credit. So now it becomes important to look at, well, what is it that I want to invest in? Do I want to invest in investment grade private credit? Do I want to invest in high-yield private credit? So that's spectrum of something is safe and risky. It's not only something that is in public markets. That is also of course very important in private markets. And of course we have seen a number of situations more recently where there are things that have been more risky, that have been more vulnerable.

So it's just an important reminder to ask those questions. Naomi, what am I investing in? Is it high quality credit? Is it high quality lending? What are the underlying credit fundamentals for the assets that I'm investing in? So the first thing I would say to what's going on at the moment is this issue that we are looking at a situation where it is becoming very important as a reminder for investors to begin to think about and ask the question, what type of risk is it that I'm exposed to? And that of course depends on am I investing in funds that are high yield in private and public or am investing in funds that are investigate in private and public? The second issue of your question is that it is correct that you can begin to of course worry about are these canneries in the coal mines where you begin to worry about, well, is this the sign of something coming down the road?

If you look at what's happening to the Moody's data for default rates for loans and for high yield, which just came out for September, that still shows a downtrend in the last four or five months. So at least when it comes to default rates in the aggregate index for high yield and for loans, which are of course the more risky parts relative to investment grade, they have actually come down. So that's suggesting that this is not the beginning of something else. This is just telling you that we actually beginning to see credit calls you slightly begin to improve when it comes to the corporate side. Similarly, if you look at the same thing for consumers, for consumers, it is also the case that if you look at delinquency rates for credit cards at auto loans from the New York Fed, you have also seen at least a flattening out.

It's correct. Also, as you say, there are some parts of subprime consumers that continue to see delinquency rates really deteriorate significantly. But in the aggregate from a macro perspective, it is the case that we have seen a flattening out of the rates. Why is that the case? Because when the Fed began to raise interest rates in 2022, people started falling behind on paying their auto loans. People started falling behind on paying their credit cards, but that's now three years ago, and now that we are getting sued into that being four years ago in the spring and of next year, then you have begun to see that we are seeing a flattening out in the level of delinquency rates for auto loans over credit cards. So therefore, I view this as a very important debate around what's going on, of course with the overall default rates for the index, for corporate credit and for consumers.

And the answer to that is that that is showing you that there is an improvement, generally speaking on the credit side for high yielder loans, and we have seen a similar, at least stabilisation for the consumer when it comes to credit cards and auto loans. So the short answer to your question is we of course are all watching very carefully what's going on, but the number one conclusion for investors is to put this lens on what is it that I'm exposed to? Am I exposed to private credit investment grade or private credit, high yield and like in public markets, public market investment grade or public markets high yield? So these two dimensions of there are safe and risky assets both in public and private markets, and this other dimension of that, if you look at the default rates and delinquency rates, they have actually generally trended in least the most stabilising direction. And that's why I come to the conclusion that this, I mean a lot of things can happen, but at this point it still looks like from these indicators that things are at least stabilising and some of them looking actually a little bit better,

Moz Afzal:
Well certainly consistent with high yield spreads across the different spectrums remain very tightened. Even though there's been various news and noise, it really hasn't led to significant widening. In fact, investment grade as you point, have actually stayed very tight and hardly flinched over the last few weeks. So moving on then, just thinking about areas of interest. You talked about industrial renaissance and what's going on in respect to policy. How do you think that will play out over the coming years? And obviously with strategic industries first, but other more cyclical industries I guess as we move into 2026 and beyond?

Torsten Slok:
Yeah, so the key issue when it comes to the industrial renaissance is that politicians around the world have decided to grow production of certain things domestically. This comes after decades of globalisation, and of course the areas where there is more focus on doing things domestically are of course in defence, is in tech. It is in biotech and pharma, and it is also in certain areas of manufacturing more broadly, namely the idea that there are some things that we should be doing at home, which should not be done now by other countries. This has created, instead of having a lot of globalisation where a lot of these things that were produced globally were produced in China, they were produced in Mexico, they were produced in Eastern Europe, they were outsourced to other countries. Politicians in the US in Europe had now come to the conclusion that they would like to home shore. Basically friend shore production to either their own country or to neighbouring countries that they are closely connected with. And if that's the case, then I think a very significant investment theme is to be exposed to that tailwind of the industrial renaissance. That means not only of course the AI and data centre build out also they associated the energy transition. Also, of course associated with the things I just talked about, that infrastructure has also gotten a lot of attention. In Germany, the government earlier this year said that they want to spend 500 billion euros on infrastructure. They also want to spend on limited on defence. Those are also sectors of course, that are having tailwinds. And we're also seeing tailwinds in pharma, in biotech, in the build out of basically growing the manufacturing sector domestically after literally decades where the manufacturing sector just got smaller and smaller. So the industrial renaissance is essentially the theme that is important in markets and is a conclusion that comes on the back of politicians in Europe, in the US, around the world saying, we need to produce these things domestically instead of relying on other countries to produce these things for us.

Moz Afzal:
So now contrasting say us and maybe digging into a little bit more in terms of Europe, what are the sort of industries that say your investors in those regions, where are they finding those opportunities? Obviously data centres is I guess, well the obvious one, but what are you seeing in sort of more traditional manufacturing? Where are they coming up with good ideas?

Torsten Slok:
Yeah, in very simple words, it is in the US it's data centres because there's 5,000 data centres, more than 5,000, actually 5,500 data centres in the US at the moment. And for example, in Germany there's only 500 data centres. Of course it's a smaller country in square miles, square kilometres. But the bottom line is that the US just has much more data centres and much more tailwind to the data centre build out than really any other country associated with that. The US is also the energy that is needed to power these data centres. This comes with a lot of opportunities. There's a lot of discussion about nuclear versus green energy, clean tech, various versions of supporting overall the data centre power built out, which also is at the moment something that has tailwind in the US in particular because the data centre build out is so more significant in the US now in Europe.

It is the case also that most of the built out in energy of course is likely in dollars and euros to be Europe in the US, but in Europe, that's likely to also continue to be energy transition and clean tech in particular, green energy is mainly being implemented in Europe. So that's why green energy and clean tech areas also that are a tailwind, but probably also at least on the green energy side, a tailwind also that is significant in the European case. In the European case, there's also focus like there is in the US on defence, and there's of course also focus on infrastructure. Europe has been saying very clearly that they want to spend more money and particularly again in Germany on infrastructure. So that is also an Industrial Renaissance area where there is more tailwinds and likely also, again, more tailwind relative to what we're seeing in the us. So in a few words, the US tailwinds are coming from the data centre build out and from energy build out. And in Europe it comes from in particular green energy and energy transition and from infrastructure and from defence. So that means that those of course are sectors and those are business areas where there will be tailwinds because these are simply things that the politicians have decided to say, these are areas where we would like to see more growth.

Moz Afzal:
So to what are the big risks do you see out there for the next 12 to 18 months?

Torsten Slok:
So I will say that one thing that of course we and the market is spending a lot of time talking about, I think about, I know you have also, and you and I have talked about this before, so is this issue of course of AI and is there a bubble? Is there not a bubble? And most importantly, perhaps AI as a tailwind to growth as a tailwind to consumer spending has been very strong. So the key issue is can the AI companies, can the magnificent seven continue to deliver the earnings that are expected in markets at the moment? So that's a different way of saying can the valuations of the magnificent seven justified the valuations we're seeing of the magnificent seven companies? The reason why this is important is that 40% of the S&P 500 today is the 10 biggest stocks in the S&P.

We have not seen that level of concentration for decades. And the consequence of thoughts of that is that if the AI story ends up not delivering all the expectations that are priced in at the moment, then it is not only the AI stock and the magnificent seven stocks that will go down. It is also of course the broader S&P 500 because the AI story makes up such a significant share. Again, 40% of the index overall. So I would say that the first risk that we and I spend a lot of time on is this issue of the tailwinds from AI have actually become so important for so many different things that it becomes very critical to have a view on whether these tailwinds are sustainable and will continue or not. The second thing that we spend time on is this issue of inflation.

So if we do have an impulse to inflation in the US coming from of course tariffs and another impulse coming from the lower dollar, the dollar down 10% since the beginning of the year, there is a risk that we might be underestimating how much inflation could be going up over the next several quarters. So that's why if inflation goes up and at the same time we have a change on the composition of the FOMC with a new fixture, we might also get some new FOMC members If someone leaves when a new fixture comes in, that could of course create a whole different discussion in fixed income where the discussion then would be around why is the Fed cutting interest rates at the moment, if there's actually up upward pressure on inflation? So that's why those two things, what's going on in AI and what's going on with inflation, those would be the two key things that we are spending time on at the moment when we think about risk to the outlook.

Moz Afzal:
I was going to say on the AI story, the thing that fascinates me, and I guess it reminds me of I guess fifties and sixties when there was a race to the moon between the US and Russia, there's a similar geopolitical angle to this in terms of AI between US and China, and they all both have very different models to how they are going to implement AI and who's going to be more successful. I guess one open source model, one much close source model. Any thoughts around that sort of narrative is that both geopolitical and if you like, competitive within the companies themselves, i.e. mag seven competing with themselves to make sure that they're the ones who actually hit those agent AI targets before their competitors do. So there's two competitive dimensions to this.

Torsten Slok:
So the short answer to your question is yes, we don't really know anyone at this point how this will play out and what China has coming in the pipeline or even what the US has coming in the pipeline. But I completely agree from a geopolitical perspective, and especially also of course from a market perspective in the us, if China suddenly comes up with a new invention that will be competing with something that one of the magnificent seven companies are doing, then of course investors in the US will also be taking a hit likely in valuations as that risk could materialise with China again, showing some strength in areas where we didn't expect that they had strength. So the bottom line to your question is this race is absolutely critical for investors to continue to monitor.

Moz Afzal:
I think as I think about 26 and 27 and beyond, I guess we're all beneficiaries of AI in some shape or form, right? And I'm sure there'll be productivity enhancements that we'll see. The big question, will we work a four day week or will we work even harder?

Torsten Slok:
We have not seen that yet, and I'm personally a bit sceptical of that playing out, at least here in the next several years. I still have not seen those applications that generate a dramatic increase in productivity gains. So I'm still of the view that let's wait and see. It's a little bit of the case of show me the money, show me the returns, show me these applications that can generate these spectacular returns and these spectacular cash flows, and at the same time these spectacular productivity gains. So until we see that, I still think that you and I and our listeners will have a job in particular, of course with the view that this will be helping us do our jobs, but it continues to be something of course that we all are monitoring with great interest in particular what the applications are. So I would like to still see more evidence of how this is going to get monetized and how these applications ultimately will be improving productivity in such a significant way, as some people are suggesting at the moment.

Moz Afzal:
I guess early mid nineties, a very popular saying was jobless recovery. Certainly in the UK that's what we used to talk about. And you just wonder whether with the advent of AI bringing this full circle to that point, whether we do see at the margin job displacement, certain, we're seeing evidence of that in young graduates and so forth, we can debate whether cyclical or secular, but you are starting to see some of that come through. And one of the certain things here at EFG we've been thinking about is this the same narrative to use jobless recovery? We never really see improvement in the job data because productivity is sort of coming through the pipe, less likely to recruit that extra person given you have an AI tool that helps you out a little bit.

Torsten Slok:
What's going on is that it may look a little bit like a jobless recovery, but at the moment we now have demographic developments that are very different from what we had in the early 1990s when we had the most prominent jobless recovery. And those are of course in Europe and ageing population, and in the US we also have an ageing population, and now we also have more immigration restrictions. So that means that there are actually scenarios ahead of us. And Japan, of course, is the most extreme, where the demographic headwinds are so strong that in Japan the population is shrinking. In Europe, the population is also at risk of shrinking. And in the US if we have less immigration, the population might not outright shrink, but it may also be population growth is lot weaker. And if that's the case, and if you do have a job as recovery, that means that at least we're not having the challenges that we had in the 1990s where that both at the same time was big immigration and at the same time had a jobless recovery.

So the little silver lining in this conversation is also that yes, we may have that AI is going to take some jobs, of course in telemarketing, we all know the examples of where AI has been getting attention as replacing workers. But I still think that AI will be labour augmenting and labour enhancing, meaning helping workers do their jobs better. And if we at the same time have some demographic headwinds that are just different from what we had in previous episodes, then I do think that there will be dampening the negative effects of AI on certain occupations.

Moz Afzal:
Indeed. So Torsten, the end of our time. Time, absolutely whiz by, thank you very much for coming on the podcast. Hopefully we have you again, have you on again very soon. So with that, we'll stop there. Thank you for listening to Beyond the Benchmark and of course Torsten Slok. Thank you.

 

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