Cullen Roche on Inflation, AI and Why the Debt Crisis is Overblown

In this episode of Excess Returns, we welcome back Cullen Roche of Discipline Funds for an in-depth conversation on the economy, markets, demographics, AI, and investing frameworks. Cullen cuts through the noise to explain the real forces shaping inflation, interest rates, the role of the Federal Reserve, and why he believes the U.S. faces more disinflationary pressures than inflationary risks. We also dive into his “defined duration” investing framework and preview his upcoming work on portfolio strategies. Topics Covered Why fears of a looming debt crisis may be misplaced Inflation outlook, tariffs, and the Fed’s “soft landing” challenge The importance of Fed independence and risks of politicization Immigration, demographics, and long-term disinflationary trends How AI is reshaping productivity, inequality, and the job market Defined Duration Investing and asset-liability matching Lessons from all-weather strategies and the Permanent Portfolio Cullen’s “Forward Cap Portfolio” and future of global markets Timestamps 00:00 – Cullen on debt crisis fears 02:32 – State of the U.S. economy post-COVID 05:18 – Inflation, tariffs, and shelter costs 10:25 – Soft landing vs. rolling recessions 14:07 – The Fed’s role and impossible job 19:25 – National debt and Ray Dalio’s crisis warning 27:52 – AI boom and disinflationary forces 31:01 – Immigration, demographics, and inflation 37:23 – Aging population and wealth inequality 43:00 – How AI impacts productivity and jobs 52:00 – Defined Duration Investing explained 1:01:34 – Portfolio strategies: Permanent Portfolio & risk parity 1:03:54 – Cullen’s “Forward Cap Portfolio” 1:06:31 – Closing thoughts and future projects