Excess Returns · Friday, July 31, 2026
Ben Hunt describes a significant 'crowding out effect' due to the massive investment in AI CapEx, leading to a dearth of capital across various sectors. He notes that this has resulted in underinvestment in other parts of the market and economy, and is reflected in rising interest rates and the cost of capital.
“We've seen all these dollars chasing into this, under investment in serial under investment in all these other parts of the market and the economy.”
“So the cost of capital, let's interest rates. And it's what companies have to borrow to finance. It's what consumers have to pay.”
“We've gone from a world awash in liquidity, I.E., capital looking for a home, to having a real dearth of capital.”