Podcast Summary: Ask The Compound – "How Much Longer Will the Bull Market Last?"

Date: December 10, 2025
Host: Ben Carlson
Co-host: Duncan Hill
Special Guest: Jurrien Timmer (Director of Global Macro, Fidelity Investments)

Episode Overview

This episode dives into the enduring bull market, examining its potential lifespan, the question of whether we’re in a new cycle or an extension of the old one, the nature and risk of bubbles (with a focus on AI), future inflation expectations, the “60/40” portfolio debate, and why the bond market seems unfazed by a slowing labor market. The team brings in Jurrien Timmer for expert macro insight and historical perspective, making sense of current conditions by comparing them with past cycles.

Key Discussion Points & Insights

1. When Did This Bull Market Start?

• Debate Over Bull Market Timing:
  • Some argue it started in 2009, following the financial crisis (Ben’s view), while others point to resets in 2020 or 2022.
  • Jurrien Timmer: Uses a “mosaic” approach, considering valuation, trend deviation, and business cycles. Believes the secular bull began in 2009, with October 2022 marking the start of the most recent cyclical bull.
    • “At secular peaks, like in 2000... the market was about 100% above that trend line. And at secular lows, it’s about 50% below. In 2009 we were 50% below.” (Jurrien, 06:07)
• Cycles Are Getting Longer & Recessions Rarer:
  • Historically, recessions occurred every 4 years, now it’s much less frequent due to changes in the economy (shift to services, policy interventions, etc.).
    • “Expansion cycles have gotten elongated and recessions have become fewer and fewer.” (Jurrien, 08:20)

Timestamps:

• [02:04] – Jurrien introduced, big-picture cycle definitions
• [05:11] – Comparison of current bull market with past secular cycles
• [08:20] – On recessions growing further apart

2. Are We in a Bubble? The AI Hype Analogy

• AI Today vs the Dot-Com Era:
  • Jurrien draws analogies between the 1990s and today’s tech surge, but notes today’s market leaders (e.g., Nvidia) have more robust earnings, unlike some overvalued dot-com stocks.
    • “A stock that goes up 100 times because it has a 100 times increase in earnings is not a bubble... it’s a very strong bull market, but not a bubble.” (Jurrien, 16:43)
  • We’re possibly in an earlier “1999” phase of the AI boom. The speculative corners are frothy, but blue-chip leaders' valuations are not yet extreme.
    • “For me it’s not a bubble... my guess is that we are kind of on that 1999 timeline. But a lot of the extremes... are just not yet in place now.” (Jurrien, 15:21)

Timestamps:

• [11:46] – Jurrien on AI/dot-com analogies
• [16:43] – The definition of a bubble

3. Inflation: Is 3% the New 2%?

• Historical Perspective:
  • Long-term US inflation has averaged about 3%. After the Great Financial Crisis, it fell below 2%, but this decade is trending higher.
    • “Over 150 years the inflation rate is 3%... So that’s kind of the baseline.” (Jurrien, 19:31)
• Structural Changes & Fiscal Policy:
  • Increased government spending, deglobalization, and potentially looser fiscal/monetary policy could make 3% a new normal.
    • “If 3 is the new 2... stock market’s not really going to care... but the bond market should care, the term premium should care and the Fed should care.” (Jurrien, 21:35)
• Disconnect Between Data & Experience:
  • Academics track inflation as a rate of change; consumers feel the pain cumulatively.
    • “The consumer is looking at this not like, ‘Well, it only went from 12 to 13 last year.’ It looks at: ‘It went from five to freaking 13 in three years. And that hurts.’” (Jurrien, 24:06)

Timestamps:

• [18:17] – Historical context for inflation
• [19:31] – Jurrien on 150-year inflation average
• [24:06] – Consumer experience of inflation

4. The 60/40 Portfolio: Dead or Dormant?

• Recent Performance and Challenges:
  • The traditional 60/40 (stocks/bonds) did well for decades but struggled when both stocks and bonds fell in 2022.
    • “Our generation... all you needed was S&P5 and Barclays, Bloomberg AG... and that was it... Bonds were negatively correlated to stocks, so when you had a drawdown, bonds were a port in the storm... That’s not how history has always been.” (Jurrien, 27:50)
• Rising Correlations & Rethinking Diversification:
  • Higher interest rates and inflation could make stocks and bonds more positively correlated, requiring investors to consider new diversifiers (gold, commodities, alternatives, etc.).
    • “If they don’t protect you against a drawdown in stocks, then what else can we own that are not bonds?... There really isn’t anything that’s negatively quoted correlated... but things like gold, various liquid alts... can play a role as substitutes.” (Jurrien, 29:12)
  • The “new 60/40” might be “60/30/10” (equity/bonds/alternatives) or something like “60/20/20.”
    • “You want stuff that doesn’t behave like other stuff... Gold has been the poster child of that.” (Jurrien, 31:17)
• Fixed Income Isn’t as Simple as Before:
  • Investors may need to get more tactical within fixed income, e.g., using short-term TIPS, T-bills, or cash.

Timestamps:

• [26:46] – 60/40 portfolio debate
• [27:50] – Jurrien reflects on the “golden era” of balanced portfolios
• [29:12] – What diversifiers to consider now
• [31:17] – Gold’s role

5. Labor Market Concerns Vs. Market Optimism

• Financial Markets Shrug Off Slowing Jobs Data:
  • Although labor market data show some softening, there’s little sign of stress in high-yield bonds or equities.
    • “Companies are not hiring, but they’re not really firing either.” (Jurrien, 34:22)
    • “Credit analysts tend to know these things before the stock market people do. But earnings are growing... margins are sky high.” (Jurrien, 35:33)
• Why? Fundamentals Remain Strong:
  • Earnings and margins are robust; consumer spending solid; AI-related capital expenditure is surging.
    • “I’ve been on 75 planes this year, I’ve traveled 103,000 miles, and I don’t think I’ve seen an empty seat... the economy’s still moving.” (Jurrien, 37:14)

Timestamps:

• [33:20] – Bond market’s lack of concern on weak labor data
• [34:22] – Jurrien on “soft but not contracting” jobs market
• [37:14] – Visible evidence of consumer strength

Notable Quotes & Memorable Moments

• On Bull Market Definitions:
  “It’s a mosaic approach... but again, it’s not an exact science. Someone can make an equally compelling case that it was some other time.” (Jurrien, 06:42)
• On Market Bubbles:
  “Bubbles are always about valuation. A stock that goes up 100 times because it has 100 times increase in earnings is not a bubble...” (Jurrien, 16:43)
• On 60/40 Portfolio Shift:
  “If you think 60/40 is dead, that means diversification is dead.” (Ben, 26:56)
• On Inflation Disconnect:
  “The disconnect between how academics think about inflation and how real people think about it.” (Jurrien, 24:47)
• On Economic Activity Post-Pandemic:
  “I’ve been on 75 planes this year... I don’t think I’ve seen an empty seat on any of the planes.” (Jurrien, 37:14)

Major Segments (Timestamps)

• [02:04] – Bull market cycles & secular trends
• [11:46] – AI = late 1990s dot-com?
• [18:17] – Inflation: past, present, and future
• [26:46] – The 60/40 portfolio debate
• [33:20] – Labor market worries vs. market optimism
• [37:56] – Where to find Jurrien’s research and closing remarks

Tone & Language

The conversation is accessible, candid, and filled with useful analogies (“bell ringing events,” “port in the storm”), charts, and real-world references. Ben and Duncan ask pragmatic, investor-focused questions, often relaying common sentiments (“everyone will be thrilled with that” on engineered recessions; “my walnuts have almost doubled” on food inflation). Jurrien balances technical explanations with broader context and humility about the limits of economic forecasting.

Conclusion

This episode is a rich exploration of market cycles, the evolving inflation backdrop, portfolio construction, and the disconnect between headline data and investor sentiment. The team brings historical knowledge and current market analysis together, providing listeners with practical frameworks for thinking about today’s economic questions, all while maintaining a light, engaging tone and skepticism about overly simple narratives.

Further Resources:

• Find Jurrien Timmer’s weekly asset allocation review on LinkedIn and X (@timmerfidel).
• To ask a question for future episodes: askthecompoundshow@mail.com