Rising Interest Rates and AI-Driven Capital Demand

Each week, the Stokes Family Office staff puts together a list of our favorite news and updates on all things wealth management. From financial planning, portfolio construction, tax and estate planning, and retirement plan services to anything we found interesting. Enjoy this week’s curated list for your weekend reading as we focus on rising interest rates, AI-driven capital demand, housing, and more!

ECONOMY NEWS

Whistling at NORAD

• Jim Bianco: People often take a real technological capability and exaggerate it into a Hollywood-style catastrophe. While AI systems have demonstrated real hacking abilities, claims about AI controlling robots, drones, or causing human extinction may be similar overextensions of genuine risks. The most likely AI threat is not apocalypse but disruption to jobs and work.

Why Didn’t We Get a Housing Bubble?

• Ben Carlson: Home prices surged more than 55% during the 2020s. Despite this, lending standards remained strong, housing supply stayed constrained, speculation was limited, and demographics plus ultra-low mortgage rates supported demand. Instead of a price crash, the housing market experienced a recession in activity, with existing home sales falling sharply while homeowners accumulated substantial equity and were largely insulated by locked-in low-rate mortgages

Related:

• • Bond Yields, Private Credit, and AI Demand
  • EVs, Interest Rates, & Economic Growth
  • Bonds, Bubbles, & Beijing
  • AI & The Bulls In Charge

MARKETS NEWS

Exposure Therapy For Investors

• Sam Ro: Market declines are normal, frequent, and unavoidable. The biggest mistake investors make is assuming every downturn is the start of a major crash and reacting emotionally by selling, which often harms long-term returns more than the decline itself.

Competition for Capital

• Peter Oppenheimer: Rising interest rates and AI-driven capital demand have increased the cost of capital, impacting equities and bond yields. Despite strong earnings growth, sector de-ratings and valuation shifts occur amid higher yields. Technology profits remain robust, but increased capex and funding needs raise risks of earnings bubbles and market volatility, prompting cautious, diversified long-term equity strategies.

CHART OF THE WEEK

At less than 17 times profit expected over the next 12 months, NVIDIA’s shares are trading near the cheapest level in more than a decade, according to data compiled by Bloomberg.

The multiple is half what the stock commanded in 2025, when Nvidia’s revenue and profit growth was slower, and down from more than 25 times earnings estimates as recently as May.

LAGNIAPPE PODCAST

Interest rates are climbing, but the market doesn’t seem particularly bothered. Greg and Doug dig into why the 10-year Treasury has pushed above 5%, arguing that stronger economic growth, persistent inflation, and the massive AI infrastructure buildout may be doing more to drive rates than fears about U.S. debt. They also look at the relationship between Iran, oil prices and inflation; why higher rates may hurt traditional parts of the economy without slowing AI investment; and what the approaching midterm elections could mean for markets. Finally, they examine the historically strong stretch that tends to follow the first three quarters of a midterm year, and why falling political uncertainty could provide another tailwind for investors.

Stokes Family Office is 100% Family Owned, and has been continually operating in the New Orleans Area for over 35 years.  As a family office, we are focused on family wealth, financial planning, and tax planning. We are your local experts for Gulf South wealth management.