Not surprised by flat retail sales; need to look at Nov-Dec together, which was not bad. Seasonal effects mean Christmas buying shows in Nov.

January will be another strong inflation month due to imperfect seasonal adjustments.

Kevin Warsh as Fed chair will face dilemma: be a sycophant and cut rates (steepening yield curve) or resist and be criticized.

Dot-com boom analogy: expectation was inflation banished and permanent growth from productivity, but 2000 saw market crash and 2001 recession.

AI as panacea for inflation won't work any more than dot-com did. Inflation will be higher than Warsh expects, forcing rate hikes.

If Fed also limits balance sheet, will cause cash shortage like Sep 2019 or Mar 2023 banking crisis, leading to Fed reversal and return to QE.

Markets want Warsh that continues with growth and rate cuts; investors interested in quantum computing and AI infrastructure, helped by lower rates.