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The idea that higher interest rates won’t cool inflation is so pervasive. It’s comical really
Bill is old enough he should know but we have gone so long without restrictive monetary policy no one knows what it means anymore
I can guarantee you at 7% FFR inflation would go down
The presumption that the Fed raising short-term rates reduces inflation is predicated on the belief that higher rates reduce demand and investment.
But what if higher rates don’t reduce demand and investment because the demand for intelligence and energy is unaffected by higher rates because winning the race for super intelligence has a near infinite ROI and the demand for compute will remain incalculable.
Why won’t higher rates at this unique moment in history therefore lead to more inflation as interest costs are embedded in everything?
And the problem is compounded as the more the Fed raises rates, the more inflation we will have and the more the Fed will need to raise rates further and so on.
But what if the old models don’t apply to the current paradigm and the Fed is wrong?
I think the Fed might have just made a mistake. Am I right or am I wrong?
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@NickTimiraos @TimDuy @colbyLsmith
Fed has been below the Taylor Rule for so much of the last 15 years that I think almost everyone in markets has forgotten the Fed can affect inflation
Whether or not they want to do it is a totally separate topic
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10yr yields going straight up as the market prices in more hikes and yet stocks go higher in tandem.
Do we need any more evidence that not enough hikes are priced in (this is of course assuming 2% inflation is a goal … but everyone gets the joke now it’s not in reality)
The 10-year Treasury yield is on track for 7 straight monthly gains—a rare feat seen only 6 times since 1950.
History check: The S&P 500 was higher 3 months later in 5 of those 6 cases, averaging a +4.7% gain. 📈📉
From @Bluekurtic
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Can you believer that Trump made elaborate plans to escalate and then at the final moment chose instead to TACO?
It’s amazing how similar the admin is to a reality TV show
The plot is the same every episode. Always a new conflict resolved but a plot that never moves forward
Per the NYT, Trump had decided to strike Houthi targets on Thursday after the Saudi Crown Prince called him again & urged him to step in. But on Sunday, he changed his mind again and decided not to — just as target lists were approved & troops were loading bombs onto US warplanes
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This agentic commerce angle / use case seems … remarkably dumb
It’s funny, Meta went from having my Instagram and WhatsApp data to now having access to my email, calendar, DoorDash, Amazon and pretty much everything.
In the last 24 hours, it bought me socks, ordered my Whole Foods groceries, booked a cleaning service and got me a burger for dinner.
Meta’s last disclosed North American Facebook ARPU was around $227/year, largely from ads. I suspect it can push that number significantly higher now that it understands not only what I look at, but what I need, what I buy and what I’m planning to do.
Also the much bigger opportunity might be becoming the aggregation layer between me and the entire internet. If Meta can take even a tiny percentage of the commerce it facilitates, or of the money it saves me, this could become enormous!
It already saved me $200 by canceling subscriptions and services I no longer needed. This feels much bigger than better ad targeting. Ads are useful but giving me money back is better imo.
One additional thought: the agent is increasingly making the decisions for me. I knew nothing about that burger place. The agent researched it, told me which burger I should order, and I just said “okay” without giving it much more thought.
Agents are becoming the decision makers in both B2C and B2B. Increasingly, every business will be selling not just to humans, but to their agents.
Everything becomes B2A: business to agents.
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Hey guys. Please. Can we stop the inflation?
Like actually. 5 years of transitory. We tried. We touched the stove. We don’t need to burn our hands off
A disastrous election night for Germany’s political establishment. These are the headlines flashing across Bloomberg terminals around the world.
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