On Chicago’s Morning Answer, host Dan Proft spoke with James L. Perry, founder and CIO of Perry International Capital Partners, about what’s fueling the bull market, the quiet dangers of inflation, and how artificial intelligence could reshape the American economy.
Perry agreed with hedge fund legend Paul Tudor Jones that the rally still has room to run, even as it inches toward a possible “blowoff” top. “I’ve been overweight in the S&P 500 for a year, and it’s been a really good run,” Perry said. “Revenues are strong, profits are up, and tech is leading the charge.” He noted that technology companies are driving much of the growth, with sector profitability hovering near 30%, compared to roughly 12% across the broader S&P.
Despite the optimism, Perry warned that the same forces lifting markets — government spending, inflation, and easy money — could set the stage for future pain. “The government is opting for policies that will continue to drive inflationary pressures,” he explained. “That’s why gold, crypto, and equities are all performing well. But that also gives us cause for concern heading into 2026.”
While investors may quietly cheer inflation’s effect on stock prices, Perry noted it’s creating a widening divide between asset owners and wage earners. “Inflation is great if you own stocks or real estate,” he said. “But if you don’t, your disposable income just can’t keep up.”
Proft pressed Perry on the role of a weaker dollar and foreign investment. Perry pointed out that the U.S. dollar is holding strong largely because its major global counterparts are in worse shape. “The yen and the euro are both under pressure due to political and fiscal instability,” he said. “So, by default, the dollar looks strong.”
The conversation turned to artificial intelligence — a topic Perry called “the real economic engine right now.” He estimated that AI investment currently makes up about 5–6% of U.S. GDP, or roughly $1.5 trillion, and could climb to 25% within five years. “AI is already driving revenue growth across the biggest companies in the world,” Perry said. “And it’s not just Silicon Valley — small businesses are using it to streamline operations and boost profits.”
But what about jobs? Proft questioned whether widespread automation could trigger mass layoffs and force the government toward universal basic income. Perry dismissed that notion, arguing AI would create more opportunities than it eliminates. “Yes, some jobs will disappear, but it’s like the transition from horseshoes to tires,” he said. “AI isn’t a job destroyer — it’s a job transformer.”
Perry ended on a pragmatic note: “This market will keep running as long as earnings stay strong and inflation remains tolerated. But when policy finally tightens, the ride could get bumpy.”
For now, the message from investors like Perry and Jones seems clear — stay on the train, but be ready to jump before it hits the brakes.