The same market betting on near-term cuts is also staring at a longer-term question: if AI and robotics deliver the kind of productivity gains their backers promise, will the natural rate of interest start moving higher instead of lower? Historical productivity surges—from steam power to the internet boom—were accompanied by higher rates as capital demand rose. Bloomberg’s base case sees trend growth in advanced economies slowing to around 1.1% by 2050, keeping rates under downward pressure. But in an optimistic scenario where AI, quantum computing, and advanced robotics lift U.S. productivity growth toward 2.4% in the 2030s, the long-term neutral rate could rise by 0.5–0.6 percentage points.
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The path matters for investors because it shapes both valuations and sector leadership. A genuine productivity boom would favor capital-intensive industries, infrastructure buildouts, and companies supplying the AI economy—yet it could also sustain higher borrowing costs, pressuring rate-sensitive assets that are thriving under today’s cut expectations. If the technology wave proves more job-displacing than job-creating, productivity gains may not be enough to push rates up meaningfully, while inequality and demand drag could keep policy looser for longer.
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