Inflation is elevated (~2.93% core), not near Fed target, and will take time. Real economy question is labor market. Job creation has slowed dramatically, but needed job growth may be only ~25k/month due to collapsed immigration (CBO estimate fell from 2.7M to 48k). This means weak job numbers might be 'okay' given new demographic reality. Risk is Fed cuts too aggressively, re-sparking inflation.

AI data center buildout adds 1.25-1.5% to GDP now ($1T+ capex). Long-term, AI will follow Bill Gates' internet rule: underdeliver 1-3 years, overdeliver 10 years. Immediate productivity gain is in coding. Long-run, tech advances are net job creators, but new jobs are in industries that don't exist yet (like internet created).

AI will become a deflationary pull several years from now as it becomes ubiquitous. Current sticky inflation (~3%) is due to post-COVID structural changes: remote work (up from 7% to 27% of workforce), deglobalization/segmentation, and reversed immigration patterns globally. These offset prior tech efficiencies.

Defends Moore for providing heterodox views, breaking Fed groupthink. Criticizes NY Fed's John Williams for singling out Moore. Highlights Fed's lack of accountability, citing 2019 op-ed by Bill Dudley suggesting Fed could tank economy to affect election, and Lael Brainard's 2016 donations to Clinton while arguing against rate hikes.

Independence is a continuum. Risk is pendulum swings too far: from Brainard's alleged conflict to Trump's desire for aggressive cuts to lower debt costs (fiscal dominance). If Fed cuts to 1% for fiscal reasons, it could never raise again without triggering market vigilantes.

Agrees managed rates reduce informational value. Yield curve was perfect pre-COVID indicator but hasn't predicted post-2020 recession due to being 'overly managed.' Historically, 2s10s spread is ~100bps. Argues short-term rates (~4%) are about right (neutral-ish), but long-term rates are too low and should go up.

Index is short duration (90% of benchmark), bulleted in 5-10y sector (curve steepener), underweight corporates (spreads at generational tights), overweight mortgages, with conviction bets in local EM debt (6.8% yield) and short-term TIPS. Expects long-term rates to rise, short-term rates held steady by Fed cuts, curve to steepen.

Maintains 4% cash, 5% bonds, 6% stocks forward return expectation. Stock market's 14% YTD gain is 70% from 41 AI stocks; other 459 stocks are near 6%. AI stocks are 47% of S&P, merging S&P and NDX composition. High valuations mean market likely disappoints over medium term, averaging 6%.

AI bubble parallels 2000 internet: not that valuations are universally insane (some are), but market prices every AI stock as a winner. Not all can win. When bubble pops, losers drop 80-90%, winners don't rise much further.