MacroVoices #538 Lyn Alden: Is The War Really Over and What’s Next For Markets?

Episode 538 of Macro Voices, recorded June 25, 2026, features an interview with bestselling author and macro strategist Lyn Alden discussing several critical macroeconomic issues in a world where the Iran conflict is reportedly concluding, traffic through the Strait of Hormuz is normalizing, and crude oil prices have collapsed from $80+ to around $69.

On the Iran conflict: While mainstream narratives declare the conflict over following Secretary Chris Wright's statement about normalized Hormuz traffic, Alden expresses cautious skepticism. She notes that the memorandum of understanding leaves substantial unresolved details regarding enriched uranium handling, on-site inspections, enforcement mechanisms, funding structures, and whether Iran can toll the strait after a 60-day period. She emphasizes this will remain a headline issue for weeks or months, though she believes the worst phase has likely passed. From her perspective in Egypt, she experienced firsthand the energy crisis that prompted government-enforced energy curfews in April 2026.

On Federal Reserve policy: Under new Fed Chair Warsh's leadership, markets initially expected aggressive rate cuts, but the dot plot suggests potential future hikes. Alden contextualizes this: Warsh historically takes hawkish positions but campaigned on dovish rate-cut arguments based on AI-driven productivity gains. However, elevated trailing inflation and energy prices from the Iran conflict forced the Fed to adopt a hawkish but vague posture to maintain credibility and avoid appearing as a political puppet. Alden expects the Fed will look through energy-driven inflation spikes, focusing instead on core inflation. Regarding the balance sheet, she maintains her "gradual print scenario" thesis—expecting steady money supply growth without crisis-driven QE, though acknowledging tail risks.

On fiscal deficits and the two-speed economy: Alden argues that U.S. fiscal deficits will remain in the mid-to-high single digits as a percentage of GDP, likely not reaching the Treasury Secretary's target of 4%. Demographics are cited as a primary reason for elevated deficits. She positions fiscal dominance as the North Star for her macro outlook—it's more powerful than most investors recognize. However, this creates a problematic "K-shaped" or two-speed economy: those positioned on the right side of AI capex or fiscal stimulus prosper, while those not benefit from these flows, particularly young families trying to buy homes at elevated rates, suffer. This divergence fuels political polarization and populism rather than spectacular debt crises.

On stablecoins: Alden is bullish on stablecoins, noting growth from $30 billion (January 2021) to $300+ billion currently, with potential to reach over $1 trillion eventually. However, she cautions against overstating their impact on fiscal sustainability. Using Citigroup's analysis, she notes that even if stablecoins reach $1 trillion in market cap with half representing new treasury demand ($500 billion), that covers only about three months of U.S. deficits. Stablecoins primarily address payment and working capital needs in fragmented currency markets (like Africa's 40+ currencies or Latin America's 30+ currencies), not a permanent solution to fiscal imbalances. The organic demand for stablecoins—from streets of Cairo to businesses in Nigeria—reflects genuine bottom-up demand that the U.S. should simply not obstruct.

On AI and valuations: Alden believes the AI capex cycle has "legs" longer than bears expect, similar to how Tesla and SpaceX have levitated far beyond fundamental justification through narrative momentum and equity-funded acquisitions. She acknowledges certain AI names are concerning valuations but notes that bears have been premature in expecting collapse. However, she also identifies an inverse opportunity: software stocks, consulting firms, and banking infrastructure companies are trading at deep value (5-6x earnings with continued growth) while AI beneficiaries trade at extreme multiples (SpaceX at 100+ times revenue). She's building a watchlist of formerly-hot growth stocks now priced as deep-value stocks with fortress balance sheets. On whether this constitutes a bubble: she agrees a correction is likely coming but cautions against timing it, noting that the AI arms race is a genuine national security imperative that will attract sustained government and private capital.

On energy and geopolitical competition: A critical concern for Alden is that AI's exponential energy demands may face U.S. political resistance while China has structural advantages. China's massive industrial base, power generation infrastructure, and centralized decision-making allow rapid data center buildout without consumer backlash. The U.S. has advantages (natural gas reserves, nuclear potential, tech talent, business-friendly environment) but must resolve state-level opposition to data centers based on noise, water usage, and power concerns. She views SpaceX's orbital data center concept skeptically—achieving the reusability and cost reduction necessary to compete with ground-based facilities within a 5-10 year horizon is an "under" bet in her view. She criticizes U.S. messaging that simultaneously promotes and restricts AI companies (citing pressure on Anthropic), which she argues inadvertently markets open-source alternatives, including non-U.S. and China-based solutions.