ARK Invest chief executive Cathie Wood said the U.S. economy is poised for a powerful rebound after years of policy-induced strain, arguing that technological deflation driven by artificial intelligence and digital assets could reshape growth, inflation, and capital markets over the next decade.
In an investor note on Saturday, Wood described the past three years not as economic resilience but as a “rolling recession” that quietly compressed housing, manufacturing, capital spending, and consumer sentiment following the Federal Reserve’s rapid rate-hiking cycle.
With those pressures now embedded, she said the economy resembles a “coiled spring” capable of releasing pent-up growth as inflation, interest rates, and regulatory constraints ease.
Productivity, Not Speculation, At The Center Of The Thesis
Wood pushed back against concerns that the AI boom has already reached bubble territory, arguing instead that the sector is still in its early economic phase.
She pointed to sharp declines in AI training and inference costs and accelerating adoption across industries as signs that productivity gains are only beginning to materialize.
According to ARK’s analysis, converging innovation platforms, including AI, robotics, energy storage, blockchain technology, and genomic sequencing, could lift U.S. productivity growth to between 4-6% annually in coming years.
Such gains, Wood said, would place sustained downward pressure on unit labor costs, allowing economic growth to accelerate without reigniting inflation.
That dynamic challenges traditional macro assumptions that faster growth must come at the expense of price stability.
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Capital Spending Shifts From Ceiling To Floor
Wood also highlighted a structural shift in capital investment.
After decades of stagnation following the tech and telecom bust, capital spending surged during the pandemic and, in ARK’s view, has now established a higher baseline rather than a temporary peak.
She argued that policy changes, including accelerated depreciation, lower effective corporate tax rates, and deregulation, could amplify this trend, supporting what ARK sees as a historically significant investment cycle led by technology infrastructure and manufacturing.
Bitcoin And Markets In A Deflationary Growth Era
The note also addressed asset allocation, contrasting gold’s recent surge with bitcoin’s supply-constrained design. Wood said Bitcoin’s low correlation with traditional assets positions it as a potential diversifier in a productivity-driven expansion, rather than merely a hedge against crisis.
Wood framed the coming years as a break from post-1970s economic patterns, suggesting that technological deflation could allow growth, falling inflation, and lower long-term rates to coexist, a scenario markets may not yet be fully pricing.
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