output-gap
2 articles
- AI Capex Has Rewritten the Fed's Reaction Function
AI investment is large enough to rewrite the Fed's reaction function through the neutral rate and inflation classification, but the funds rate barely touches AI capex. The real transmission runs through spreads and term premia.
- The Fed Cannot Repair a Supply Shock: Why Tightening Into the Oil Crisis Is Stagflation by Construction
The Fed is tightening demand into a supply-driven energy shock. China is already suppressing global oil demand through import cuts and reserve drawdowns, making additional Fed tightening economically redundant and mechanically stagflationary.