When 1999 Meets 1990

This report examines the 2026 economic landscape, drawing parallels between the current AI boom and the 1999 tech bubble while highlighting structural inflation and fiscal deficit challenges.

Key Takeaways

• 1.The AI boom exhibits strong parallels to the 1999 tech bubble, characterized by high-valuation IPOs for unprofitable companies and rapid valuation surges.
• 2.Contrary to expectations, AI has not been disinflationary; structural inflation remains elevated due to demand-side factors and a five-year target overshoot.
• 3.Fiscal deficits in major economies (US, China, Germany) are structural and expected to remain higher for longer, driven by defense spending and domestic industrial needs.

Table of Contents

• When 1999 meets 1990...
• Q1 US earnings season has been great though...
• Are we about to party like its 1999?
• What history tells us about impact of AI...
• Fiscal deficits in the largest economies in the world are set to be structurally higher for longer
• The main cause of the 5yr inflation overshoot is demand and not supply...
• Appendix 1