Warsh’s Tasks

The AI boom is fueling the Fed’s hawkishness, as Ed and Elias agree it should, since it’s also fueling inflation currently. Yet Fed Chair Warsh asserted at his confirmation hearing that AI is a disinflationary force. They agree with that as well: It is disinflationary over the long term, which is the crux of our Roaring 2020s economic thesis; but paradoxically, AI is escalating inflation now as rapid demand spurs rapid infrastructure buildout. Once AI adoption is widespread, however, the productivity growth it sparks will propagate disinflationary economic growth. … Also: A look at who will lead Warsh’s five new task forces. … And: Consumers continue to do what they do best. Visit Yardeni QuickTakes: https://yardeniquicktakes.com Get your first month of QuickTakes Premium for free: https://quicktak.es/Yt-0a Visit Yardeni Research (institutional): https://yardeni.com (0:00) - Intro (3:09) - Great Expectations: Earnings Season Outlook & Risks (6:51) - Fed Chair Warsh: Task Forces & Forward Guidance (14:34) - Warsh's To-Do List & AI's Economic Impact (20:16) - AI's Inflationary Consequences & Rising Real Rates (25:56) - Market Valuation: Forward Earnings & Sector Expectations (29:09) - Market Breadth: Mag Seven, Value & Small Caps