Cam Harvey: Through the Noise

Cam Harvey and Robert Olinger examine why surprisingly weak nonfarm payroll growth didn’t trigger the market reaction many investors might expect—and why the headline jobs number may be missing the bigger economic story.

Harvey argues that structural changes in the U.S. economy, including lower immigration and AI-driven productivity gains, could mean that modest employment growth is becoming the new normal. With unemployment remaining low, he explains why positive payroll growth can still be consistent with a healthy growth outlook.

The discussion then turns to interest rates and the Federal Reserve. Harvey questions whether policymakers should be trying to slow economic growth at a time when the U.S. faces enormous fiscal obligations and an extraordinary wave of technology investment.

At the center of the episode is the competition for capital. Massive AI infrastructure and data center investments are creating demand for financing, potentially pushing yields higher across government and corporate bond markets. As capital flows toward projects offering higher expected returns, other industries may face higher borrowing costs and reduced investment.

Harvey argues that rising rates should therefore not automatically be interpreted as an inflation story. Instead, they may reflect expectations for stronger growth and unusually attractive investment opportunities created by technological innovation. In his view, this market-driven reallocation of capital could be essential to maximizing long-term U.S. economic growth.

Is the U.S. bond market really entering a crisis with “no historical parallel”? In this episode of Cam Harvey’s Through the Noise, Cam Harvey and Robert Olinger examine the headlines surrounding rising Treasury yields and explain why a 10-year yield above 5% needs to be viewed in a much broader historical and economic context.

Harvey argues that today’s interest rates are less extraordinary than the near-zero rates that followed the Global Financial Crisis and COVID-19. He examines what the yield curve is signaling about economic growth and uses 10-year Treasury and TIPS yields to show why inflation expectations alone do not explain the rise in long-term rates.

The discussion also explores concerns about U.S. government debt and the risk of monetizing that debt through money creation. Harvey explains why market-based inflation expectations are important when evaluating those concerns and why he believes fiscal challenges are not the primary driver of higher Treasury yields.

The conversation then turns to what Harvey sees as a key force behind rising rates: competition for capital. With corporations raising significant amounts of financing—particularly to support AI infrastructure and data center investment—investors need higher yields to supply that capital. Harvey connects this dynamic to expected real interest rates, economic growth, corporate bond spreads, and the shape of the yield curve.

Finally, Harvey addresses claims that China is abandoning U.S. Treasuries, explaining how offshore custody centers such as Belgium, Luxembourg, and the UK can complicate interpretations of official Treasury holdings data.

The central takeaway: a high interest rate cannot be judged as good or bad in isolation. Understanding bond yields requires examining inflation expectations, real rates, capital demand, economic growth, fiscal conditions, and the yield curve together.

Cam Harvey examines “p(Stag)” — the probability of stagflation — and what a high-inflation, low-growth environment could mean for investors and portfolio construction. Drawing on ongoing research into stagflation and asset management, Cam explains why inflation should not be analyzed in isolation. The economic growth environment matters: an upside inflation surprise during a recession can carry very different information for markets than the same surprise during normal or strong growth. Cam outlines three key ideas from the research: distinguishing stagflation from overheating, using real-time indicators that investors can actually act on, and measuring the acceleration of inflation. He then explores the historical implications for equities, fixed income, the traditional 60/40 portfolio, TIPS, commodities, gold, trend-following strategies, and long-short equity strategies. The episode also considers current inflation risks, Treasury yields, breakeven inflation expectations, and why portfolio risk management can matter even when investors disagree about the exact probability of stagflation.

Yes, we are experiencing prolonged war, persistent inflation, 18% of our taxes go to pay only the interest on 40t in debt, long-rates are breaking 5%... but why all the pessimism?

In my latest podcast, Through the Noise, with Robert Olinger, I dare to focus on the positives. 

1. Unemployment is low and there is no sign it is set to jump. The AI jobpocalypse is increasingly unlikely. New opportunities continue to outpace displacement.

2.Inflation is annoyingly high at 3.4%. However, it is hardly a crisis. The breakeven 10-year inflation is 2.4% - somewhat above the Fed target.

3.Real wages have kept pace with inflation

4.A long rate of 5% is historically, no big deal. A normal yield curve will have a premium of a few percent over short rates. Indeed, it is the rate that we had 20 years ago. What was unusual was the very low long rates.  Crucially, the rate has increased but this is due to increases in the expected real rate - not inflation. Indeed, breakeven 10-year inflation has not increased over the past 12 months. Higher expected real rates may be an indication of higher growth opportunities. 

5. Growth opportunities have increased. We have four technological revolutions happening simultaneously - that has never happened before - with AI opportunities leading the charge. GDP growth averaged a tepid 1.7% in the first two quarters. The Atlanta Fed is projecting 4.4% in the third quarter. The key issue is whether 10% is possible in the near future.  

6. The stock market is near all-time highs. Yes, the stock market has been wrong many times before. However, this is not 1929. One obvious difference was the lack of technological innovations in 1929. Furthermore, it is not 1999. At that time, there was one technological innovation - the internet - with a much smaller potential to impact GDP. 

To me, pessimism is overwhelmed by the case for optimism.

This is not to say there is no risk. There is plenty of risk. Historically, every great innovation has downsides. With AI, the scale of the upside potential is vast - and the downside potentially existential. The best approach is to manage the risk, not seek to eliminate it.

In this episode of *Through the Noise*, Cam Harvey and Robert Olinger examine the debate surrounding Federal Reserve interest rate policy and challenge the conventional narrative about rising Treasury yields.

Harvey explains why the Federal Reserve has much more influence over short-term interest rates than long-term rates—and why the market’s focus on a potential 25-basis-point move may distract from the bigger economic story.

The discussion explores how long-term interest rates affect corporate investment decisions, why inflation expectations may not explain the recent rise in yields, and what credit spreads and massive financing for AI data centers reveal about capital markets.

Harvey offers an alternative interpretation: higher real yields may reflect investor expectations for stronger real economic growth. With companies making major investments in artificial intelligence infrastructure and data centers, rising long-term rates could be signaling accelerating productivity and economic growth rather than economic weakness.

Instead of viewing higher long-term interest rates strictly as bad news, Harvey argues that markets may be pricing in robust growth opportunities as the economic impact of AI innovation begins to emerge.

Take the AI literacy test. No cheating with AI! 

How many of these terms do you know: RSI, FLOPS, TTC, ASI, GAN, HAL, CAISI, CoT, FLOPs?

What about GPT? Over a billion users of ChatGPT every day and very few of them can say what GPT stands for without looking it up. 

Time's up. Pencils down. Let's dig in as I explore how AI went off the rails and got caught cheating with AI.

The average investor was excluded from the explosive upside when SpaceX was a private company. That upside was reaped by “accredited” investors The average investor is largely excluded from the IPO allotment - a few crumbs were thrown. Now, the average investor is faced with investing at $170. Academic studies show that the long-term returns of IPOs in excess of reasonable benchmarks like the S&P are modest - or non-existent.

In this episode of Through the Noise, Cam Harvey unpacks one of finance's most consequential and least understood rules: who counts as a "qualified investor." In the US, the label has nothing to do with knowledge or credentials. It comes down to wealth. Cam traces the rule to the 1929 crash and the Securities Act of 1933, explains why its costly disclosure regime made sense then, and argues that it now locks ordinary people out of the highest-return investments, from SpaceX to OpenAI to Anthropic. With information cheaper and more abundant than ever, he makes the case for a lighter, intermediate tier of disclosure that would let far more investors participate early, diversify properly, and share in the companies shaping the future.

A $1.75 trillion IPO is about to hit the market, and the mechanics behind it could leave retail investors holding the bag. In this episode of Through the Noise, Cam Harvey breaks down how SpaceX's Nasdaq debut triggers a wave of forced index-fund rebalancing, and why recently waived listing rules amplify the distortion. With only 4% of shares trading freely, a little-known Nasdaq provision counts SpaceX at three times that weight, pushing demand and the price artificially higher. Drawing on his research into the unintended consequences of rebalancing, Cam explains why the spike is only temporary, how the correction unfolds, and the asymmetric information gap that leaves everyday investors dangerously exposed. If you are tempted to buy into the hype, understand the mechanics first.

In this episode of Through the Noise, Cam Harvey unpacks his newly published Financial Analysts Journal paper, "Fundamental Growth," and applies its lessons to the most anticipated IPO of the year: SpaceX. Cam explains why traditional value and growth indices misclassify stocks, leaving investors exposed to expensive, low-growth names. He then turns to the mechanics of the SpaceX offering, a $1.75 trillion market cap with only 4 percent float, and reveals how accelerated inclusion rules at Nasdaq, S&P, and Russell will force passive funds to chase a tiny pool of shares. The result is a predictable price surge that benefits insiders while leaving retail investors holding the bag. A timely, analytic-driven look at the structural forces shaping modern markets.