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Dear Reader,

“I never thought I’d see this many years of really high productivity” remarked Jerome Powell, outgoing Chair of the Federal Reserve (Fed), after nearly nine years at the helm of the institution. Indeed, US productivity has been growing at a pace of 2% in recent years, twice the pace observed during the 2010s. It is premature to attribute this performance to artificial intelligence (AI): ChatGPT was only unveiled to the world in November 2022, and the widespread adoption of AI agents within companies accelerated only very recently. While the impact of AI on productivity statistics may take several years to materialise, financial markets have already priced in this anticipation.

So far, the most visible macroeconomic effect of the AI boom has been on corporate investment. What, then, is driving this remarkable surge in American productivity? Beyond the remarkable adaptability demonstrated by the United States, the answer is relatively straightforward: it stems in part from energy independence. The shale oil and gas revolution of the 2010s, based on hydraulic fracturing, transformed the country. Once the world’s largest buyers of oil and gas, the US has become one of the world’s leading exporters.

Today, US natural gas is cheap and the primary source of US electricity, accounting for approximately 41% of national production in 2025 according to the US Energy Information Administration (EIA). Electricity, the backbone of all economic sectors, is on average twice as cheap for Americans as for Europeans, and a third less expensive than for Japanese consumers. This abundance and low cost allows workers and machines to operate at full capacity, with little concern for energy consumption.

The challenge, however, is that fossil fuels are the energies of the past. Analysts anticipate a doubling of energy needs related to AI in the US over the next two years, a trend already integrated by the market, as evidenced by the surge in share prices of companies specialising in low-carbon energy, particularly renewables. The major advantage of these companies lies in their exceptionally low levelised cost of electricity (LCOE), granting them a significant competitive edge. The recent mega-merger between NextEra and Dominion illustrates this dynamic: two-thirds of NextEra’s revenue already comes from renewable energy (wind and solar). With this acquisition, the American company, already the world’s largest producer of wind and solar electricity, expands its portfolio, notably in nuclear power.

The Chinese government, meanwhile, has taken a radically different approach from its American counterpart. While fossil fuels, especially coal, accounted for more than 80% of China’s electricity mix until 2010, they are expected to represent less than 60% by 2026, a level comparable to that of the US. China is now the world’s leading producer of solar panels, the largest wind market, and the principal investor in power grids and storage. Its ambition is not limited to dominating production: China is rapidly consolidating its position across the entire renewable energy value chain. China is not just accelerating its energy transition—it’s setting the pace for the world!

The catalysts behind the acceleration of the energy transition are largely linked to the rise of AI and the pursuit of strategic autonomy, intensified by geopolitical instability. Although AI’s impact is not yet directly reflected in US productivity, it is nonetheless dominating investor focus in equity markets, relegating geopolitical concerns to the background. Thus, even as interest rates reach levels not seen in decades, putting pressure on Kevin Warsh (the new Fed Chair, who took office in mid-May), AI is now emerging as a more powerful driver than geopolitics and a clear source of productivity gains.

In this edition, we slightly revised our macroeconomic scenario, which remains resilient despite an upward adjustment in inflation forecasts. We also highlight the contrasting reactions of the markets, characterised by a decorrelation between asset classes and geographic regions. A special focus will be devoted to Latin America and the appeal of investing in emerging market debt at a time where diversification is key.

The entire editorial team joins me in wishing you an enjoyable read!

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_{Monthly House View, 01.06.2026. - Excerpt of the Editorial}