Summary Points
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Kevin Warsh’s potential appointment to the Federal Reserve could bring about significant changes, including balance sheet reduction and regulatory adjustments.
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The decline of the US dollar is attributed to rising interest rates in other countries, making their currencies more attractive, rather than signaling the end of American exceptionalism or dollar debasement.
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Public perception of the economy is largely driven by concerns about inflation, despite the Federal Reserve’s assurances. This is compounded by the fact that goods are 27% more expensive than they were five years ago, leading to a belief that the economy is contracting.
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The rapid evolution of AI technology is disrupting traditional business models, particularly in the software as a service (SaaS) industry. This shift is benefiting ‘normie’ companies, which can reduce their reliance on costly SaaS subscriptions and increase their bottom line.
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The revaluation and restructuring of private equity and private credit, driven by over-investment in data centers and high-valuation loans, could potentially lead to a recession. The impact of this is still uncertain.
Resources