MIT's Microscopic Health-Tech Tools in Action

Summary

Bloomberg Businessweek: MIT's Microscopic Health-Tech Tools in Action

Episode Date: October 17, 2025
Hosts: Carol Massar & Tim Stenovec
Guest: Lauren Goodwin, Economist and Chief Market Strategist, New York Life Investments

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Overview

This episode primarily offers a high-level analysis of the current financial market landscape, with a focus on the growing influence and scrutiny of private credit, the evolving narrative around artificial intelligence (AI) in the tech sector, macroeconomic outlooks including inflation and stagflation risks, and portfolio diversification strategies. Economist Lauren Goodwin joins the hosts for an in-depth exchange on these themes, providing both data-driven observations and candid personal assessments.

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Key Discussion Points & Insights

1. Private Credit & Market Risk

Timestamps: 01:52–04:46

• The episode commences with a discussion about the vulnerabilities and oversight issues in the private credit markets, particularly in light of recent warnings from financial leaders such as Jamie Dimon.
• Goodwin notes the rise of private capital stepping in after banks' post-crisis retrenchments, highlighting similarities and risks compared to traditional banking.
  • Quote: “There is some really just high quality lending, very well backed, normal activity happening and there’s some more challenging fraudulent activity happening.” — Lauren Goodwin [02:38]
• Monitoring private credit requires closer scrutiny because default rates and other key metrics can have less standard definitions than in public markets.
• The ongoing shift in the lending landscape is seen as critical to the broader economy, likely to feature more prominently in investment discussions going forward.
  • Quote: “You have to be much more careful with things like default rates or some of the more standard areas of data that are going to have different definitions depending on who your lender is.” — Lauren Goodwin [03:08]

2. Shifting Sentiment Around Artificial Intelligence

Timestamps: 04:46–06:34

• Recognition of a recent surge in skepticism toward AI, despite previous excitement and ongoing investment.
• Goodwin observes heightened questioning after significant spending announcements by Nvidia and OpenAI, raising doubts about the sector's earnings sustainability.
  • Quote: “I think the catalyst ... was really this sort of Roy Boss spending announcements out of Nvidia and OpenAI that have have raised questions about the sustainability of the great earnings capacity that we’ve seen in AI.” — Lauren Goodwin [05:18]
• She is monitoring for signs of "bubble conditions," especially if tech firms move from self-funding to raising debt for AI investments, noting this transition is still in its early stages.
• Despite strong recent revenues from big tech companies, a market correction is seen as plausible, though Goodwin maintains that overall market tailwinds—like Fed rate cuts and easing quantitative tightening—are currently stronger than the headwinds.

3. US Economy: Inflation, Stagflation, and Policy Uncertainty

Timestamps: 07:24–09:01

• Goodwin offers her macroeconomic forecast:
  • Moderate growth ahead (projected <1.5% GDP growth).
  • Core inflation to remain sticky (~3%—slightly above consensus), leading to a “stagflation light” scenario.
  • The lasting effect of tariffs on prices will become more pronounced around the holiday season and into the following year.
  • She frames the outlook as “not an overly bearish view on the US economy,” noting the interplay between uncertain inflation and potential productivity gains driven by technology.
  • Quote: “That’s a stagflation light scenario … not an overly bearish view on the US Economy, but it’s one where the Fed and the market are grappling with these same questions.” — Lauren Goodwin [07:54]

4. Diversification & Gold's New Role

Timestamps: 09:01–11:40

• The panel discusses asset allocation and the function of gold in modern portfolios.
• Goodwin advocates for diversification as a more prominent theme, contrasting the last 15 years when US large-cap tech outperformed most alternatives.
  • Closing international underweights, adding gold, and commodities are among the approaches being considered by investors.
• Goodwin is personally bullish on gold as a new “asset class,” though she cautions most individual investors not to overweight gold due to its lack of yield.
  • Quote: “Gold has become a new asset class and … we will continue to see the price of gold rise in the coming years.” — Lauren Goodwin [10:10]
  • She attributes the increasing gold demand to central banks and corporations hedging against political volatility, especially post-Russia’s invasion of Ukraine, amid stagnant supply and momentum (“FOMO”) flows.
    • Quote: “There’s structural factors related to central banks ... trading dollars for gold. That’s accelerated this year … in response to some of the political volatility we’ve seen.” — Lauren Goodwin [10:47]

5. Market Mood: Optimism or Caution?

Timestamps: 11:47–12:15

• In closing, Goodwin characteristically leans constructive but stops short of outright optimism:
  • Quote: “My economist brain will always want to be pessimistic, but I am … I’m constructive. I think that we have some, some tailwind economy and markets that get us through another nine months.” — Lauren Goodwin [11:57]

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Notable Quotes

| Timestamp | Speaker | Quote | |-----------|----------------|-----------------------------------------------------------------------------------------------------------------------------------------| | 02:38 | Lauren Goodwin | "There is some really just high quality lending, very well backed, normal activity happening and there's some more challenging fraudulent activity happening." | | 03:08 | Lauren Goodwin | "You have to be much more careful with things like default rates or some of the more standard areas of data that are going to have different definitions depending on who your lender is." | | 05:18 | Lauren Goodwin | "I think the catalyst ... was really this sort of Roy Boss spending announcements out of Nvidia and OpenAI that have have raised questions about the sustainability of the great earnings capacity that we've seen in AI." | | 07:54 | Lauren Goodwin | "That’s a stagflation light scenario … not an overly bearish view on the US Economy, but it’s one where the Fed and the market are grappling with these same questions." | | 10:10 | Lauren Goodwin | "Gold has become a new asset class and … we will continue to see the price of gold rise in the coming years." | | 10:47 | Lauren Goodwin | "There’s structural factors related to central banks ... trading dollars for gold. That’s accelerated this year … in response to some of the political volatility we’ve seen." | | 11:57 | Lauren Goodwin | "My economist brain will always want to be pessimistic, but I am … I’m constructive. I think that we have some, some tailwind economy and markets that get us through another nine months." |

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Segment Timestamps

• 01:52 — Introduction of Lauren Goodwin & Market Sentiment
• 03:24 — Private Credit, Risks, and Regulatory Questions
• 04:46 — AI Hype Cycle and Investment Skepticism
• 07:24 — US Economy Outlook and Inflation Concerns
• 09:01 — Portfolio Diversification & the Case for Gold
• 11:47 — Market Outlook: Constructive with Caution

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Summary for Listeners

This episode delivers pragmatic, well-rounded insights surrounding financial system vulnerabilities (especially in private credit), the evolving conversation about AI as both an economic driver and a sector with ‘bubble watch’ potential, and the importance of portfolio strategies such as diversification and including gold. Lauren Goodwin’s balance of realism and data-driven optimism, coupled with concrete market observations, provides actionable thought starters for investors and market observers navigating an uncertain but opportunity-rich environment.

Transcript

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Bloomberg.

[Lauren Goodwin]

Audio Studios Podcasts Radio News.

[GSK Narrator]

You're listening to Bloomberg Business Week with Carol Massar and Tim Stanovec on Bloomberg Radio.

[Interviewer]

Lauren Goodwin joins us now, economist and chief market strategist at New York Life Investment. She's here with us in the Interactive Brokers Studio. Lauren, let me just get your perspective on again, acknowledging what we don't know, and there's a lot we don't know. The kind of mood that we've seen develop over the course of this week, I think beginning with those comments from Jamie Dimon of JP Morgan suggesting there could be some problems with private credit that have gone ignored or unattended to now. We see this kind of action in the regional banks today. Your sense of just kind of how you're watching this unfold, what you're looking for and what it might tell us about the market.

[Lauren Goodwin]

It's such an important question and to be honest with you, as I've worked with public and private markets, investors for the last 15 years this has been on the radar. As banks pulled back after the financial crisis, private capital has stepped in in a meaningful way to fuel business activity. And one of the things that's sort of become apparent to me in this, let's call it shadow bank, as is commonly, the shadow banking system is a lot like the normal banking system. There is some really just high quality lending, very well backed, normal activity happening and there's some more challenging fraudulent activity happening. And so in terms of what we monitor, it's all the same stuff you monitor in the public markets. The major difference is that you have to be much more careful with things like default rates or some of the more standard areas of data that are going to have different definitions depending on who your lender is. Makes it a little more difficult to parse in the private markets, but it's the same idea.

[Co-Host/Interviewer]

I mean, I feel like we still have to figure out what happened here, right? I mean, I don't know, there are regulators over Zion, so you would assume that everybody was being a bit more careful. Having said that, I mean, when you think about private markets and Jamie Dimon, what he said this week, are you getting a little bit more nervous about that there might be more problems in the financial system?

[Lauren Goodwin]

I think it's incredibly reasonable, as you.

[Co-Host/Interviewer]

Said, private markets for a while now.

[Lauren Goodwin]

Yeah, I think it's so reasonable to be more attentive, let's say, when you have valuations and credit spreads where they are.

[Co-Host/Interviewer]

Right.

[Lauren Goodwin]

You know, it gets more and more difficult for people to see enormous amounts of upside in economic activity and market activity as well. And when you have a lending system that is so important to the real economy, it, again, it's, it's, it's, it's reasonable to say, hey, what's going on in this, in this enormous segment of the economy that has grown so much over the last five to seven years. And so I think this is going to be an area that's going to draw more and more importance in our investment conversations. Coming up. The when it comes to making investment decisions though, you're seeing all in yields in these asset classes that are still attractive to investors. The transition that we're seeing then is a focus on quality, on workout capabilities, on, you know, if there is a problem in these asset classes, how do these teams navigate?

[Interviewer]

When you were mentioning sort of the surge that we've seen of interest in private credit, suffice to say there's been a surge of interest in AI and artificial intelligence as well. And it does strike me that over the last week or so there's been kind of a different conversation surrounding it. Maybe one of outright skepticism, maybe one just sort of about needing to see more proof in the pudding. And I wonder if you're seeing that as well, how you're rethinking about thinking about the kind of breakneck growth we've seen in AI and what needs to happen in the quarters ahead.

[Lauren Goodwin]

I'm absolutely seeing this. It's really interesting actually. I just got back from a three week roadshow with our clients in Europe. I was expecting a lot of things, but I wasn't expecting all of my conversations to include a big portion just about AI and US tech and, and what's really going on there. And I would say that the, the skeptics story is increasing. I think the catalyst, in addition to valuations being high, etc. I think the catalyst for this was really this sort of Roy Boss spending announcements out of Nvidia and OpenAI that have have raised questions about the sustainability of the great earnings capacity that we've seen in AI. What I'm really watching to determine whether this is reaching bubble conditions is the transition from capitalizing tech spend from cash off of these companies balance sheets and into the debt markets. It's starting, but it's really early. I think we need to see that mature more before I be really concerned about bubble conditions.

[Co-Host/Interviewer]

All right, that's really interesting because I do feel like last earnings time we looked at things like Meta and some of the big hyperscalers and we did see them actually having an impact from all the spend in terms of boosting revenues. But I feel like we're going to have to go through that once again. Having said that, you know, we've had quite a bounce back on the equity side of things. It would be normal to see maybe another correction of some sort here.

[Lauren Goodwin]

I think that's right. But there's a. I can make a list of five or six really credible reasons why you might see a pullback in the equity market and specifically US Tech. But as we think about, about the next six to nine months in the equity market, the tailwinds are stronger than the headwinds. You have a Fed that's, that's cutting interest rates. You have quantitative tightening that looks like it's likely to be easing. You have tax refunds in the spring that look like they're going to be much stronger than they've been in recent years. There's really a lot of important tailwinds to this market. And so until we See, the hyperscalers say demand is falling. Until we see the headwinds with respect to trade, etc. Really make their way into the data, we're likely to see a pretty constructive market backdrop over the next six to nine months.

[Interviewer]

Just for your perspective on the economy. So we heard a lot from Chris Waller today. He was on our air in the morning and then our colleague Tom Keene sat down with them at cfr. They had a longer conversation still, you know, and his perspective here is, you know, another quarter point cut here at the next meeting. Talked a lot about the labor market, inflation, your sense of where this US Economy is, particularly when it comes to inflation, the stickiness thereof. How are you thinking through sort of where that's headed?

[Lauren Goodwin]

Yeah, this is another area where we've spent a lot of time because we anticipate that the first level sort of impact of tariffs to consumer price inflation are here, but aren't really going to be felt until the, until the holiday season in the turn of the year. And so I anticipate that we're going to have next year a growth environment that's slower. We're looking a little below one and a half percent. So it's a little below consensus inflation. That's about a little higher than consensus where it's sticky around 3%. For core inflation, that's a stagflation light scenario. But when you, again, when you, when you layer on, you have the modifier. Yeah, when you add the modifier, it's, it's. No, it's, it's, it's, it's not an overly bearish view on the US Economy, but it's one where the Fed and the market are grappling with these same questions while you have the overlay of sort of relatively bullish for the economy and for inflation, meaning inflation lower story coming out of AI. There's just really, when we talk about the long term implications of inflation, things like technological change in productivity and demographics are always on the list and you put a question mark by them and that's what we're all going to be grappling with over the next year.

[Interviewer]

It's so funny because I've been kind of watching all these conversations happening in Washington.

[Co-Host/Interviewer]

Yeah.

[Interviewer]

Talked with some of our colleagues down there and they say the same thing, which is there's the promise of increased productivity, but nobody really knows at this point.

[Lauren Goodwin]

It gives us all permission to acknowledge the lack of conviction. Right. And look, it's interesting, I think that there is, there is a, you know, a trade to place in money to be made by having a really sort of one sided perspective on this issue of inflation in particular. What we're seeing investors do is instead lean way more into diversification. And it's funny because diversification isn't a new investment idea. But if you look back in the last 15 years, your ideal asset allocation wouldn't have actually been very diversified. You should have been all in on us large cap growth equity for your ideal allocation. And so closing underweights to international equities, adding gold and other commodities, that's where.

[Co-Host/Interviewer]

I wanted to go. Because gold is up what, 64%.

[Interviewer]

Carol's always had 20% gold.

[Co-Host/Interviewer]

Yeah, if only if, but over such a long time gold did nothing. So I mean how much should it be in your portfolio?

[Lauren Goodwin]

So I am of the team, here's one of the areas where I do actually have a strong conviction personally I am of the team that gold has become a new asset class and that we will continue to see the price of gold rise in the coming years. We've heard folks like Ray Dalio say that gold should be as much as 15% in your portfolio. I think that's a little high for the average wealth investor if only because it is not a yielding asset class. And so when you look at price return off of equity by comparison, it's kind of cheating. You really should look at what's your.

[Co-Host/Interviewer]

Take on why it's going to safe.

[Lauren Goodwin]

Haven or is it there's. So there's hedging or a pushback on.

[Co-Host/Interviewer]

The dollar like what is it there?

[Lauren Goodwin]

So there's structural factors related to central banks over the last really since Russia invaded Ukraine have been meaningfully trading dollars for gold. That's accelerated this year as a result of central bank and corporate hedging. In response to some of the political volatility we've seen out of the U.S. i sort of demand for gold to continue. There's also not been much development in supply. It's you know, you can't wish gold mines into being. And so it's, there's been a little bit of a hold up and down.

[Co-Host/Interviewer]

Necklaces as we speak that front.

[Lauren Goodwin]

And then I think right now we are seeing a bit of a momentum or FOMO factor coming in where investors that maybe you know, set it and forget it or wouldn't have thought very much about this are saying like did I miss the boat on this one? And piling in nuts.

[Co-Host/Interviewer]

Yeah, well it's fun though in your portfolio.

[Interviewer]

Not enough. I'll say that unequivocally.

[Lauren Goodwin]

Well, a gold bar costs, what, more like more than $1 million now? So it's the, the, the starting prices.

[Interviewer]

Yes. I.

[Co-Host/Interviewer]

Barrier to entry on a day just got like 30 seconds. On a day when we're feeling just a little bit nervous and wondering, is this the beginning of something to come undone? Are you more optimistic or pessimistic about the outlook?

[Lauren Goodwin]

My economist brain will always want to be pessimistic, but I am, I am. I'm constructive. I think that we have some, some tailwind economy and markets that get us through another nine months.

[Co-Host/Interviewer]

I didn't hear optimism?

[Interviewer]

No.

[Lauren Goodwin]

Optimistic.

[Interviewer]

No, no, no.

[Lauren Goodwin]

Too late.

[Co-Host/Interviewer]

Thank you so much.

[Lauren Goodwin]

Thank you for having me.

[Co-Host/Interviewer]

Great to have you back. Lauren Goodwin, she's economist and chief market strategist two hats at New York Life Investments. Joining us here in studio.

[Barry Ritholtz]

I'm Barry Ritholtz, inviting you to join me for the Masters in Business podcast. Every week we bring you fascinating conversations with the people shape markets, investing and business. CEOs, fund managers, billionaires, Nobel laureates, traders, analysts, economists, everybody that affects what's going on in the market. Whether you own stocks, bonds, real estate, commodities, crypto. You really need to hear these conversations. Sometimes it's behaviorists like Dick Thaler or Bob Shiller. Sometimes it's fund managers like Peter Lynch, Bill Miller, Ray Dalio. Sometimes it's authors. Michael Lewis, author of the Big Short and Moneyball. Regardless of the conversation, these are the folks that move markets each week. That's the Masters in Business podcast with me, Barry Ritholtz. Listen. On Apple, Spotify, or wherever you get your podcasts.