Gold just posted its third straight weekly loss. That is not supposed to happen with geopolitical risk so high. The reason is simple: the Fed is back in charge. Warsh’s hawkish inflation stance has traders pricing hikes again. For gold, higher rates beat war premium. https://t.co/ijSb8QGbWv
This should worry every AI company planning an IPO. Chinese AI models have gone from 1% to over 50% of token consumption on OpenRouter in under a year. Businesses are choosing them because they're cheaper, faster & good enough for most tasks. "Good enough" is how every technology market gets commoditised. The US had a head start but the gap is closing faster than anyone expected.
Japan just hiked rates to the highest level since 1995. The yen is now at its weakest level since 2024. That's not supposed to happen. The reason it is: Japan moved rates to 1% while the US is at 3.75% & may hike further. Speculators are still borrowing cheap yen to buy higher-yielding US assets and one small hike doesn't change that math. Japan spent $73bn trying to stop this last month. It's back at the same levels.
Yesterday's Fed meeting was the most unusual in years. Here's why it matters. Warsh held rates, stripped forward guidance, skipped his own dot plot projection, & launched task forces to review everything. His answer to every policy question: "We have a task force for that." The committee showed half projecting a hike, half a hold. Median dot: 3.8% by year-end (one 25bp hike). September hike odds are at 50%+ from 30%. But is Warsh himself a hawk or dove? Nobody knows - he deliberately didn't say. For decades, the Fed told markets what to expect and Warsh has changed that. Whether that's bold reform or reckless opacity depends on what inflation does next.
