Carlyle's portfolio companies employ about 750,000 people around the world, and the data set built from them says the economy is doing quite well: GDP out of August around 2.25% to 2.5%, a resilient consumer and growing EBITDA.
The standard complaint about the hyperscalers' borrowing is that it crowds private borrowers out of the bond market. Harvey Schwartz agrees that it does, and says that is the wrong thing to worry about.
"That should be expected, not feared."
Schwartz runs Carlyle, which was holding its annual Global Investor Conference in Washington that day with 400 investors in the room, about a mile from the building where the Federal Open Market Committee was beginning its rate decision.
The full segment is covered here so you can skip it.
Here are the 7 insights that matter.
👤 Guest: Harvey Schwartz, CEO of Carlyle
🎙️ Host: Daniel Berger, the Bloomberg reporter who interviewed him at Carlyle's Global Investor Conference in Washington
👥 Also on: Lisa Abramowicz and Jonathan Ferro, who anchor Bloomberg Surveillance and handed to the conference
🧩 Other segments: Ted Mortonson of Baird and Guneet Dhingra of BNP Paribas
📰 Published: 15 September 2026 on the Bloomberg Surveillance feed
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 11 min
Key Takeaways
Carlyle's own data, drawn from several hundred companies employing about 750,000 people, says the economy is doing quite well
GDP out of August around 2.25% to 2.5%, a resilient consumer, growing EBITDA, and inflation neither accelerating nor decelerating
Schwartz does not think a hike means a hiking cycle has begun
He has run the firm for three years on the assumption that rates are structurally higher
Larger deficits, high global demand for capital and de-globalization all need durable capital
Hyperscaler spending is fiscal stimulus in everything but name, and the crowding out it causes should be expected rather than feared
Carlyle returned $37 billion to investors over the past 12 months while its shares fell close to 30%
He is buying stock back under a $2 billion authorization rather than explaining the gap
He says the private credit window is in the rear view mirror, and that Carlyle called it
On AI safety his answer is that two things can be done at once: "people figured out how to put airbags in cars"
1. What 750,000 Workers Show
Daniel Berger opened from the conference floor, noting that the Federal Open Market Committee was starting its rate decision about a mile away at the Eccles Building, and asked what Carlyle's view into hundreds of companies is telling it.
The room: 400 investors from all over the world, whom Schwartz described as some of the most sophisticated investors in the world.
The data set is 15 years old and proprietary. Carlyle started breaking down the data and the insights from its portfolio companies 15 years ago — several hundred companies employing about 750,000 people around the world.
What it says, against a backdrop he listed as de-globalization, the conflict in Iran and the war in Europe: "the economy is doing quite well."
The specifics: GDP coming out of August looks like 2.25% to 2.5%, the consumer has been quite resilient, and EBITDA is growing.
On prices: "Inflation has remained sticky, but it's not accelerating, but it's not decelerating."
His clients are not trading the meeting. Carlyle's people are not that focused on what any one individual Fed decision means.
The distinction he drew is between a hike and a cycle. "The markets obviously are expecting a hike, but it doesn't feel like we're entering a hiking cycle. It doesn't feel like we're entering a cycle where we're going to be cutting rates aggressively."
On the wish for zero rates: "For those that are always wishing for rates to go back to zero, that generally is not consistent with an economy that's doing as well as ours is."
2. Predictability, Not Level
Berger recalled Schwartz saying during the 2023 hiking cycle that Carlyle could handle higher rates and that predictability was what mattered, then listed what has changed: a Fed chair who wants to give less forward guidance, an activist Treasury, hyperscaler issuance moving rates around, and an energy crisis.
"I don't know that we have a predictability problem."
On the Fed chair's agenda he was supportive with a caveat. The chair has announced a series of initiatives which Carlyle thinks are welcomed by the markets over the long run, and Schwartz said the question is the pacing of how they get implemented.
His framing of the last decade is that policy was built around cheap money. There was a series of policies anchored around lower rates globally, and that is what has ended.
3. Structurally Higher Rates
Asked why, by Jonathan Ferro, Schwartz gave the structural case rather than a cyclical one.
"We have for years now, for three years, been working under the assumption that rates would be structurally higher."
"Because deficits are larger."
Global demand for capital is very high, and de-globalization is driving what he called a complete reordering of priorities in how governments and companies think about economic growth.
The spending those priorities require is long-dated. National defense in the traditional sense, investment in economic growth, data security and energy security — all of it, he said, requires durable capital.
The conclusion is a rate view rather than a forecast. With deficits as large as they are, Carlyle expects rates to be structurally higher.
He also rejected the idea that current rates are high. "But on any relative basis, historically, they're really not that high."
What that changes in practice is discipline, not appetite. Working with clients, he said, it is about the cost of capital and being disciplined about deploying it.
4. Crowding Out, Expected
Berger's follow-up was that nothing seems to slow Carlyle down — not higher rates, not oil at $100, not 10-year yields at 5% — and asked whether anything can.
His answer started with the scale of what the hyperscalers are spending. If the same amount were being put into the economy by a government, he said, "we'd be talking about a massive fiscal stimulus."
It is not confined to the US. He said Carlyle is seeing it spread globally across the global economy.
He conceded the crowding out that critics point to. This massive period of investment does have a crowding out effect: it puts pressure on bond spreads and on the cost of capital.
"That should be expected, not feared."
The other side of it is what the spending buys. "But it's fueling economic growth in a very, very powerful way."
And it is producing deals. Carlyle is seeing very unique opportunities to deploy capital — and, unlike a lot of others in the industry, has been returning a lot of capital.
5. The Share Price Gap
Berger supplied both numbers and then asked the uncomfortable question: Carlyle has returned $37 billion over the past 12 months, and yet its shares are lagging its peers and are down something close to 30% year to date.
Schwartz's only comment on the $37 billion was "It's a large amount."
His explanation for the sector starts with the run before it. The industry went through a period of really accelerated share growth.
Then the story changed. A year ago, he said, the whole conversation would have been about private credit — and "It seems like the private credit window's in the rear view mirror."
He claimed the call. "We had very strong views on it. They seem to have come to fruition. So at least we were right about that."
What he offers instead of an explanation is execution. Carlyle announced a three-year plan and posted record second-quarter results, and he repeated a single formulation twice: "We do our job. The share price will follow."
The board approved a $2 billion share buyback in the first quarter, and the firm was very active in the second. "We like where the shares are priced. We'll keep buying back shares."
6. MIT and the Data Set
Berger turned to that day's other announcement — that Carlyle is joining MIT's AI Impact Consortium, whose stated goal is deploying AI in a way that is good for society and industry — and asked what Carlyle is giving it and what it changes.
The origin is his own arrival. "When I joined Carlyle three and a half years ago, I got very lucky." One of the projects already under way was how to use machine learning to make better investment choices.
His framework for the technology has three questions and nothing else. "How can we run Carlyle better? How can we make better investments? How can we improve the value of the portfolio of companies? Full stop, that's it."
The asset is the history. Carlyle has a huge history of proprietary data, which he tied to the firm being in Washington for almost 40 years since David Rubenstein founded it.
What changed is that the data became usable. "which really prior to the advancement of large language models wasn't achievable. And you couldn't do it in the way we can do it today."
The work is the ecosystem around the data — how to make better investment choices and, in his words, how to really create alpha.
MIT is one of several. He called it a huge partnership and said Carlyle has partnerships around the world with leaders in the space.
7. Airbags for AI
Berger asked the question the rest of the program had been asking all morning: as someone financing AI, using it across portfolio companies and leading thousands of employees, is he concerned?
His first move was to legitimize the question. "I think anytime you see transformative technology and we're in a step function change, I think questions should be raised."
"I don't think anyone knows the answers to these questions, but they're important questions to raise."
He called the debate around safety and social awareness a healthy part of the process, and said it does not mean growth will stop or that anyone is saying to halt it.
What he expects from the technology is breakthroughs in industry growth and in medical science, alongside moments of growing pains and nervousness.
Where he puts the responsibility is on policymakers and the technology leaders together, to make sure there are proper guardrails — and he said they have started to do this.
The analogy is the one that carries the answer. "Hey, people figured out how to put airbags in cars. We can be able to do two things at once." Grow one of the most important transformative technologies ever and do it safely; he said he is very confident that can happen.
Bonus Insights
Carlyle has taken a minority stake in the Seattle Seahawks, backing Vinod Khosla's purchase of the franchise, and Berger raised it in the last minute of the interview.
Schwartz's reasoning starts from the same technology he had been discussing. Everybody is on their phone all the time in New York or in Washington, and "One thing people crave, they crave content."
The specific appeal is the argument, not the game. People like arguing with their friends about their teams and then being friends afterwards, in what he called a very polarized world — so Carlyle is a believer in deploying capital in a space that brings people together.
He said sports and entertainment is not new for the firm, and that there are other investments Carlyle has made and announced which he did not go through for time.
He called the NFL the world's leading sports franchise, and asked Berger whether he had watched the Seahawks' opening win. Berger said he caught part of it and is not a big football person, and Schwartz offered to send him some swag.
Schwartz's bottom line is that the AI build-out is a stimulus large enough to reorder the cost of capital, that the crowding out and the higher rates it produces are the price of growth rather than a warning, and that Carlyle's answer to a 30% share price decline is to keep returning capital and buying its own stock.
Products, Companies & Tools Mentioned
Carlyle (Schwartz's firm: several hundred portfolio companies employing about 750,000 people, $37 billion returned over 12 months, a three-year plan, record second-quarter results and a $2 billion buyback)
MIT AI Impact Consortium (Carlyle announced it was joining that day; its stated goal is deploying AI in a way that is good for society and industry)
Seattle Seahawks (Carlyle has taken a minority stake, backing Vinod Khosla's purchase — its first sports franchise, on a thesis about demand for content)
Watch the full episode:
If this was worth your time, send it to someone who has to have a view on this.
Get the latest market chatter as it happens: