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Moelis & Co.'s Eric Cantor Talks AI Supercycle
Brief
The episode opened with the hosts flagging fresh forecasts — JP Morgan projecting roughly 5.40% on 30-year and 4.85% on 10-year yields and Barclays cautioning rates could rise further — then shifted to Moelis vice chair and former House Majority Leader Eric Cantor’s view that the market is in a major investment 'super cycle' centered on digital infrastructure, data centers and hyperscalers. Cantor said robust earnings and constructive M&A dialogue reflect that cycle, while private equity is employing creative exit mechanisms to return capital to LPs. He highlighted a tightening 10-year corporate-to-Treasury spread (now under ~100 bps vs. a historical ~150 bps) as evidence of a capital competition between corporates and the U.S. government, warned that rising federal net interest costs will spur political action, and stressed confidence in U.S. private-sector-driven growth despite unease about Washington.
Why it matters
Speaker 2 cited new JP Morgan forecasts calling for a 30-year yield around 5.40% and a 10-year around 4.85%, with Barclays warning long-term rates could move higher.
Key details
- Speaker 3 (Eric Cantor) described a 'super cycle' driven by digital infrastructure — data centers and hyperscalers — saying most Moelis conversations are downstream of that shift and that earnings have been 'stunning,' keeping M&A activity constructive.
- Cantor noted the spread between 10-year corporate investment-grade and the 10-year Treasury has tightened to under ~100 basis points from a historical ~150 bps, implying either healthier corporates or a weaker government and intensifying a 'race for capital' between corporates and the U.S. government.
- Cantor said private equity is using creative solutions to return capital to LPs when traditional exits are scarce, and warned federal net interest costs are high enough that markets and politics will force Washington to act; he expressed faith in the private sector but acknowledged concerns about Washington's responsiveness.