On Chicago’s Morning Answer, Dan Proft sat down with Jim Perry, founder and CIO of Perry International Capital Partners, to discuss the unfolding investigation into Federal Reserve Governor Lisa Cook, the latest jobs data, and broader questions about where the U.S. economy is headed.
Lisa Cook Investigation Raises Alarm
The Department of Justice has opened a criminal investigation into Federal Reserve Governor Lisa Cook, who was appointed by President Biden and recently fired by President Trump. Allegations center on multiple instances of mortgage fraud, where Cook reportedly claimed three different “primary residences” in separate jurisdictions to secure more favorable loan terms. Perry was blunt: “That’s mortgage fraud, plain and simple.” He noted that Cook is not the first Fed official forced out over misconduct, citing prior cases involving insider trading. “She’s either too corrupt or too careless to hold that position,” Perry said, adding that her lawsuit to contest the firing is unlikely to succeed.
Jobs Report and Fed Policy
The August jobs report showed just 22,000 positions created, with the unemployment rate inching up to 4.4 percent. Perry dismissed the increase as marginal, pointing out that unemployment remains historically low. What is unusual, he argued, is how the Federal Reserve is interpreting its dual mandate of inflation and employment in light of an AI-driven labor market shift. Federal Reserve Chair Jerome Powell’s speech at Jackson Hole highlighted the future of work in an era of automation, but Perry said Powell’s comments were ultimately neutral on rate cuts. While many on Wall Street expect cuts soon, Perry warned that the economy is already flush with money due to years of fiscal and monetary stimulus.
Flood of Stimulus and Rising Costs
Perry painted a picture of an economy distorted by trillions in government spending and Federal Reserve asset purchases. Since the 2008 financial crisis, the money supply has quadrupled to $30 trillion, while the Fed’s balance sheet has ballooned from under $1 trillion to $7 trillion. He cautioned that while asset holders and large corporations are thriving, middle-class families are being squeezed. Home prices, rents, and car costs remain at record highs, leaving younger households struggling to build wealth. “Disposable income at the household level is under tremendous strain,” he said.
Stock Market Strength and AI Boom
Despite those pressures, Perry remains bullish on equities, especially in the tech-heavy S&P 500. The so-called “Magnificent Seven” firms—Nvidia, Meta, and others—continue to post enormous earnings growth, driven by acquisitions and dominance in emerging AI markets. Perry believes the AI revolution is real, estimating that spending on AI could reach $10 trillion globally in the next four years, or roughly one-third of U.S. GDP. He said AI is already cutting costs in industries from logistics to healthcare, providing real productivity gains that support high valuations.
Gold, Crypto, and Long-Term Risks
Even as big companies soar, Perry pointed to gold and cryptocurrency hitting new highs as evidence that investors are hedging against systemic risks. With U.S. national debt at $38 trillion and deficits entrenched, Perry doubts the financial system can survive “in its current form” indefinitely. He suggested that a realignment of global finance may be inevitable, though he emphasized that major U.S. banks remain highly profitable in the meantime.
Wealth Gap and Social Stability
Perry closed with a warning about the widening wealth gap. Asset owners continue to benefit from inflation and market growth, while middle-class households face stagnation. “The bifurcation of wealth is getting worse and worse,” he said. “That’s the biggest problem, and it won’t fix itself.” Without policy adjustments, he cautioned, economic strain could spill into broader social instability.