The macro calls that could define the next decade of investing

Anyone trying to make sense of today's investment landscape is confronted by no shortage of competing narratives. Inflation is either stubborn or beaten. Interest rates are either heading higher for longer or on the cusp of being cut. Artificial intelligence is either the biggest investment opportunity in a generation or the next great bubble. Layer on geopolitical tensions, questions about Australia's economic competitiveness, and an increasingly uncertain policy backdrop, and it becomes clear why investors are struggling to separate the signal from the noise. That won't stop us all from trying, however. That being the case, I thought I'd better bring in the heavy artillery - Tim Toohey, Chief Economist at Yarra Capital Management, and Scott Haslem, Chief Investment Officer at LGT Wealth Management. While the pair occasionally approached the issues from different angles, there was remarkable alignment on the broad direction of travel. Both see Australia's economy slowing over the year ahead. Both believe AI will reshape productivity in profound ways. And both think investors should spend less time reacting to headlines and more time thinking about the structural forces that will shape markets over the next decade. For Toohey, one of the biggest surprises may still lie ahead when it comes to inflation; "I actually think people will be somewhat surprised by how fast it comes down." His view is that inflation may retreat much faster than markets currently expect, paving the way for a very different interest-rate outlook. Haslem, meanwhile, argues investors need to look beyond the inflation debate altogether and focus on the productivity gains AI could unleash. "Things that boost productivity should boost real growth and boost the neutral rate of interest." Together, those views paint a fascinating picture of the investment landscape: one where short-term macro fears may be overstated, but the longer-term consequences of productivity, policy and portfolio construction deserve far more attention than they currently receive.