Gina Martin Adams says the United States is in the largest capital spending boom in at least 150 years of its history, and that this, rather than inflation, is what has pushed long-term interest rates higher.
The market spent the morning waiting on a quarter-point decision from the Federal Reserve. She said the size of that move changes nothing she thinks about stocks, bonds or earnings.
"It's too small to really influence the outlook. And I also think that the market is priced for an emerging Fed tightening cycle."
Martin Adams is HB Wealth's Chief Market Strategist, and before that was Bloomberg Intelligence's Chief Equity Strategist and Head of Equity Strategy and Fund Research.
The full segment is covered here so you can skip it.
Here are the 7 arguments that matter.
👤 Guest: Gina Martin Adams, Chief Market Strategist at HB Wealth, previously Chief Equity Strategist and Head of Equity Strategy and Fund Research at Bloomberg Intelligence
🎙️ Hosts: Jonathan Ferro and Lisa Abramowicz, who anchor Bloomberg Surveillance on Bloomberg Television
🧩 Other segments: Stuart Russell, Professor of Computer Science at UC Berkeley, and Jim Zelter, President of Apollo Global Management
📰 Published: 16 September 2026 on the Bloomberg Surveillance feed
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ length not available
Key Takeaways
A quarter-point move does not change her outlook, because the market is already priced for a full tightening cycle
Rates and stocks are rising together for the same reason, and the reason is growth rather than inflation
Most of the move in long-dated yields is real rates, not inflation expectations
The United States is in its largest capital spending boom in at least 150 years, and that is what is lifting core inflation
Not prices at the pump, she said, but the spending itself
Higher oil will destroy demand, but in the parts of the economy that were already weak
Diesel prices are at new all-time highs, above where they were in 2022
The consumer's recovery in the first half of the year came from tax refunds and nothing else
Even 75bps of hikes would not show up in earnings until late 2027 or 2028
The calls for an artificial-intelligence slowdown push spending into 2029 rather than cancelling it
The 2028 and 2029 assumptions are still above $1T
The rotation she sees is out of the companies that sell into the build-out and into the companies paying for it
1. 25bps Doesn't Move It
Ferro opened on the decision due that afternoon and asked whether a quarter-point move changes her view. It does not.
Her answer was that the increment is beneath the resolution of a forecast: "It's too small to really influence the outlook. And I also think that the market is priced for an emerging Fed tightening cycle."
What she expects instead is continuity. "Rates are going higher," she said, with stocks probably higher over the longer term and more volatility in the short run.
She treated the volatility as seasonal rather than a signal: "It is September. That's the only month of the year in which you normally see stocks fall."
The bar for changing her portfolio view is specific: "We need to see a downtrend in earnings growth or some sort of change in economic fundamentals to get really different outcomes for portfolios."
Ferro introduced her off a note in which she wrote that "the 10-year is already extremely oversold, but the longer-term drivers of high yields appear unlikely to fade anytime soon."
2. Growth, Not Inflation
Ferro asked what in this backdrop produces higher rates and higher equity prices at the same time, which is not the usual pairing.
Her one-word answer was growth: "Higher growth. It just is simply growth."
She granted that some inflation risk is embedded and that there are supply-side shocks to contend with, but said the driver is investment feeding gross domestic product growth.
On the composition of the move in long-dated yields: "Inflation expectations certainly have driven some of the movement in the long end of the curve, but most of this is just real rates going higher because growth prospects are improving, along with enormous capital spending."
"We're in the midst of the largest capital spending boom in at least 150 years of U.S. history, and that's creating different outcomes," she said.
Her explanation of where core inflation is coming from follows from that: "Core inflation is going higher, not because prices at the pump are going higher, but because we're spending so much on capital investment."
3. Where Oil Bites First
A co-host put the two constraints to her — that higher oil could squeeze vulnerable consumers, and that higher rates could squeeze the spending plans — and asked whether there is any evidence of demand destruction yet.
"Not yet, but it's early," she said.
She expects it to arrive, and named where: "I think that we probably will see demand destruction on the consumer side as a result of higher oil prices."
On freight and transport, she gave the price: "We will see transportation struggle to some degree because diesel prices are at new all-time highs. We're sitting at diesel prices that are higher than they were in 2022."
Her point is that the damage lands where growth was not coming from anyway. The consumer industries have not been big contributors, and "The consumer experienced a minor recovery in the first half of this year as a result of tax refunds and tax refunds alone."
"But what's really powering economic growth is capital spending from the technology companies," she said, and that spending filters through the whole system.
The only thing she thinks would stop it is the central bank deliberately forcing a slowdown in capital investment.
4. The Fed Is Playing Catch-Up
Her framing of tighter policy is corrective rather than restrictive, and she traced it to a decision made a year earlier.
"But the Fed, in my mind, is playing catch up," she said.
The original error, on her account, was easing into government spending cuts: "I think a lot of this is in 2025, they probably should not have loosened policy to accommodate the DOGE sort of cuts that were happening at the federal level."
What follows is not tightening so much as unwinding: "Now we need to take back that insurance that was put into the marketplace in 2025 just to normalize policy rates to be in line with what growth and inflation conditions suggest."
She also noted that the artificial-intelligence companies themselves are now asking for a slowdown, which she expects to produce somewhat slower growth ahead.
5. Hikes Hit Earnings in 2028
The co-host pressed on the number the market is actually discussing — 75 basis points of increases — and asked whether that would constrain the earnings momentum she has penciled in.
She said it would not, because the consumer momentum that hikes would damage is not there in the first place.
To the extent it reaches earnings, she said, it reaches them through the consumer; to the extent it reaches business investment, "it's got to be just minor." She described it as removing the excess of 2025.
The timing is the load-bearing part: "If Fed policy tightens today, I wouldn't anticipate that really impacting earnings until late 2027 or 2028." "It just has too much of a lagged impact."
If growth does decelerate before then, she said, the cause will be something other than this week's decision.
The mirror image of that lag is what is happening now: "What we're experiencing now is an earnings revival in part because of the eases of last year."
6. A Smoother AI Cycle
Ferro raised the companies saying their own technology could threaten human life — "A one in 10 chance of ending humanity in the next several years, which is kind of crazy" — and asked whether that does not argue for a pause in investment.
She agreed it should, and said it already is producing friction: it "should lead to a slowdown in investment," at least in the development pipeline.
She does not expect it to touch 2027, because the data centers already in the pipeline are what deploys the technology that has already been built. "Does it lead to a slowdown in investment into 2027? Probably not, because you still need the data centers in order to ultimately sustain the development that has already occurred."
Where it lands is later: "What a potential slowdown in the development cycle does is potentially slow down the 2028, 2029 investment assumptions, which are still for more than a trillion dollars in spending coming in 2028, 2029."
Her conclusion is that the money is not cancelled, only spread out: "It effectively smooths the cycle. But frankly, the AI train has left the station."
"We're going to continue to see AI deployed. It's just a matter of the pacing of that deployment and the speed of the development that occurs," she said, adding that all of it had been pushed into a very short cycle.
Even on today's technology, she said, the space and the computing power are still needed.
7. The Spenders Now Win
Ferro asked what a stretched-out cycle does to the companies that sell the equipment. Her answer was a rotation inside the technology sector rather than out of it.
She said that trade is left "a little bit in the dust," and that the market has not yet appreciated it, because prices had been set for an enormous boost in activity in the very short run.
Stretching the cycle out, on her reasoning, improves the near-term profitability of the companies doing the spending, because they can monetize what they already have for longer before it is cannibalized by the next generation.
"So I think what you see is this rotation inside technology that's kind of profound," she said.
Her description of the positioning going in: "Frankly, everybody's been all in on all of the companies that are going to benefit from spending, leaving the companies that are actually spending behind."
"Now I see an environment where the companies that are spending money might actually see some monetization of that spending faster," she said. "They'd perform reasonably well, while the companies that were the beneficiaries of the spending maybe take a backseat for the short run."
Bonus Insights
Ferro opened the hour on the market's own posture going in: "We begin this hour with stocks and bonds edging higher ahead of the Fed's latest decision."
He introduced her as "An old friend of ours and an old friend of this program," and noted that she was in the studio in person.
She did not dismiss the inflation case outright, allowing for embedded inflation risk and "a lot of supply side shocks that we have to contend with" — her argument is about which force is larger, not that one of them is absent.
On the artificial-intelligence companies calling for a slowdown, her expectation is modest rather than dramatic: "So we will see a little bit slower growth going forward."
Martin Adams's bottom line is that this is a growth story being misread as an inflation story: real rates are rising because the United States is spending more on capital investment than at any point in 150 years, a quarter-point or even three-quarters of a point from the Federal Reserve will not reach earnings until 2028, and the slowdown the artificial-intelligence companies are asking for moves spending later rather than removing it.
Listen to 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: