The labor market has slowed dramatically from 158,000 jobs/month to 29,000, but this matches the new population growth reality of near-zero immigration. The Fed is cutting rates to 'juice' the economy, but we can't get to 100,000 jobs/month without massive wage inflation because there are no new workers.

Markets are all going up: crypto, gold, silver, stocks, bonds, foreign markets. The only thing not rallying is the dollar. They're perceiving the economy is okay and inflation is low, which I don't agree with.

The risk is they cut rates to stimulate an economy that doesn't need it and create inflation. We saw this last year: the Fed cut 150 bps and long-term yields went straight up because the market said 'We don't need this, you're just going to create inflation.'

Inflation is an issue and will stay an issue due to tariffs and remote work. Average tariff rate has gone from 2.5% to ~18%. Companies are now passing these costs along. Core CPI is 3.1% and I think it will go to 3.5-4% by next summer.

If you need to create 100,000 jobs/month, you must entice the 62 million people not working (students, housewives, etc.) by raising wages—wage inflation. Overall inflation should follow wage inflation.

I would chain myself to the door and say don't cut rates. Look at where financial markets are: stocks, gold, M2, home prices at all-time highs, bonds rallying. What problem do we need to fix? The financial markets aren't worried about low employment.

Markets are going up due to animal spirits and passive investing. It's a perpetual motion machine: passive flows bid up markets, which excites animal spirits to hand over more money. The 'buy the dip' mentality is extreme—retail investors want bad news to scare others into selling so they can buy.

This aggressiveness creates mispricing. In AI, 41 companies are 47% of S&P 500 market cap and 70% of gains since ChatGPT. No one is discriminating—it's like the .com bubble. There will be malinvestment, like overbuilding of data centers (similar to Global Crossing's fiber overbuild).

If everybody wins to this degree—gold up 50%, silver 70%, Bitcoin doubled, stocks roaring—people just pay up for everything, and you get inflation. The top 10% save 35% of income and bid up assets; the bottom 90% have zero savings and get crushed by rising prices.

The Fed's mistake would be to prioritize unemployment over inflation. In 2022, Powell told the top half to 'lose money' as patriotic duty to fight inflation. Now he wants to goose asset markets higher, which will just create more inflation.