CHICAGO, August 14 — Northern Trust Asset Management President Mike Hunstad took to Barron’s Roundtable Friday to lay out a case that has Wall Street leaning in: artificial intelligence may be the most potent deflationary force the economy has seen in generations. Host Jack Otter steered the conversation toward the intersection of technology and finance, a space where Hunstad’s firm has operated for well over a century.
Northern Trust Asset Management, a division of Northern Trust Corporation, traces its roots to 1889, giving it a front-row seat to every major economic shift since the Gilded Age. This time, Hunstad argued, the shift is being driven by machines.
The Mechanism Behind the Prediction
Hunstad’s thesis is straightforward. AI, he said, is automating processes that once required layers of human labor and time. By streamlining operations—from supply chain logistics to back-office workflows—businesses can cut costs at nearly every turn.
The result isn’t just efficiency; it’s a potential drop in the prices of goods and services across industries. The logic hinges on productivity.
When AI optimizes resource allocation, it reduces waste. When it enhances efficiency, it lowers input costs. And when those savings trickle through the economy, they can deflate prices in sectors that have long been shielded from such pressures.
Otter pressed for examples. Hunstad pointed to the financial sector itself, where Northern Trust has already deployed AI to handle tasks like data reconciliation and risk assessment.
The gains, he noted, aren’t just marginal—they’re transformative.
A Historical Lens
Northern Trust’s longevity offers a rare perspective. The firm has weathered depressions, recessions, and technological revolutions, each reshaping how money moves through the economy. But AI, Hunstad suggested, may be different.
Past innovations—like the assembly line or the internet—expanded what was possible. AI, by contrast, may redefine what is necessary.
That distinction matters. If AI can perform tasks faster, cheaper, and with fewer errors than humans, the economic implications are profound. Hunstad didn’t claim this would happen overnight.
But he made clear that the direction is unmistakable: toward a world where AI doesn’t just assist but leads.
What to Watch Next
The Barron’s Roundtable segment didn’t end with a prediction. It ended with a question: How far can this go? Hunstad didn’t offer a timeline.
But he didn’t need to. The message was clear—AI’s deflationary potential isn’t a hypothetical.
It’s a trend already in motion, with Northern Trust and its peers placing their bets accordingly. For now, the focus remains on the mechanisms: automation, efficiency, optimization. The rest—the falling prices, the shifting markets—will follow.
And if Hunstad is right, they’ll follow faster than most expect.
Sources
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