To Save the Economy… We’re About to Break It

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Last week, the Federal Reserve raised interest rates for the first time in three years in a unanimous 12-0 vote, right as the 10-year Treasury closed above 5% for the first time since 2007.

Of the 14 rate-tightening cycles between 1955 and 2009, only four weren’t followed by a recession within 18 months.

The Fed just started another one.

In this video, I’ll break down:
• Why the Fed, which voted 9 to 3 against raising rates in July, flipped to a unanimous 12 to 0 vote just seven weeks later.
• How the damage from capital tightening won’t stay isolated to the AI bubble.
• How rate hikes impact today’s economy.
• What happens when the biggest buildout in history has to keep borrowing right as borrowing gets more expensive.
• How the AI cycle is building at nearly twice the pace of the housing boom at its peak.

👉 I post everyday here:

All illustrations, visuals, and animations in this video are original and hand-drawn by a freelance artist.

Disclaimer: The information provided in this video and on this channel (collectively, the “Content”) is for informational, educational, and entertainment purposes only and does not constitute investment, financial, legal, or tax advice, nor a recommendation to buy, sell, or hold any security or investment strategy. Investing involves risk and you must do your own research. Nothing in the Content should be interpreted as creating a fiduciary relationship, financial advisory relationship, or client relationship of any kind. The host, the channel, and all affiliated entities expressly disclaim any and all liability for any direct or consequential loss or damage arising directly or indirectly from the use of, reliance upon, or interpretation of the Content. By viewing or interacting with the Content, you acknowledge and agree to these terms and release the host and all related parties from any and all claims related to your reliance on the information provided.

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20 COMMENTS

  1. "This is an absolute masterpiece of financial journalism! You connected the dots between Federal Reserve policies and the AI capex boom in a way that makes total sense. Brilliant breakdown and extremely eye-opening!"

  2. Land near good jobs. And people's time. Thats not the full story. You can be born in hsinchu. Have the hardest competition to get educated so you can compete for that one position in tsmc. Have a few hundred supporting business in around hsinchu to soak up the spill over. Yet… your salary in our region is on average less than the average salary of taipei. And you pay the same everything for the same goods

  3. I genuinely wonder why our entire macro economy is leveraged up to its eyeballs, burning terawatts of power and trillions in capital, just so ChatGPT can reply: "That is a fantastic question! Here is a detailed breakdown." We built a multi-trillion-dollar speculative bubble just to automate corporate polite email responses. Peak modern finance.

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