The US economy appears solid, but according to Mark Dowding, CIO, Fixed Income of RBC BlueBay, tensions are brewing beneath the surface. Strong investments in artificial intelligence are driving growth, but this isn't visibly translating into higher incomes. This phenomenon has become known as "Ghost GDP": growth figures look promising, "but this GDP doesn't seem to be ending up in anyone's pockets," according to Dowding.

For now, the economy is still in the so-called infrastructure phase. The construction of data centers and AI-related facilities directly impacts investment figures and supports growth. However, according to Dowding, the real risk lies in the next step: the adoption phase. Widespread application of AI in sectors like legal services, insurance, and asset management could lead to a more rapid weakening of the labor market.

Companies that lose their pricing power or market share will invest more in technology while simultaneously having to reduce costs, which could cost jobs. If this adjustment extends over ten years, it is manageable. But given the pace at which AI is developing, Dowding believes there is a real chance that this process will be more abrupt and cause material disruption.

Moreover, according to him, it's not self-evident that lower prices in professional services will lead to higher volumes. Demand there is relatively inelastic. This means that many AI investments could result in a redistribution of market share, a zero-sum game, rather than additional growth.

The macro conclusion is clear: accelerated AI adoption could create a more disinflationary environment. This prospect supports longer-term government bonds, but simultaneously increases the risk that the current apparent stability in the economy proves less robust than the growth figures suggest.

Read the latest updates from BlueBay CIO, Fixed Income Mark Dowding