Markets Weekly Notes

Feb 9 – Feb 15 · 2026-W07

1 event this week

🌍 FATF grey list update Compliance 📈 Warsh productivity bet Markets ⚡⚡ Survey week Data Engineering

🧠 Feynman Takeaway
Markets continued digesting the Warsh AI productivity thesis. Forbes asked: 'Why an inflation hawk might lower interest rates.'

2026-02-10 Warsh AI Thesis Debated

Warsh AI Thesis Debated

In plain English Forbes published 'Why an inflation hawk might lower interest rates' — exploring the Warsh paradox. If AI delivers a productivity boom, potential GDP rises, and the neutral rate (R*) could fall, allowing the Fed to cut without reigniting inflation. Markets bought the story: yield curve steepened.
Analogy Warsh is saying: 'I'm scared of inflation, but I'm also excited about AI making everything more efficient. If AI works, I can cut rates without causing inflation.' It's like a firefighter who's also an architect — he worries about fires but builds fireproof buildings.
Why it matters This thesis would be tested violently when oil spiked to $125 in April (inflation from energy, not demand — different ballgame). But in February, the Warsh put was alive and well.
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