Powell's last meeting held rates but drew dissents from both sides. The Fed held steady for a third straight meeting, and four officials dissented, the most since 1992. Trump appointee Stephen Miran voted for a quarter-point cut. Beth Hammack (Cleveland), Neel Kashkari (Minneapolis) and Lorie Logan (Dallas) backed the hold but objected to a statement sentence signalling the next move was likelier a cut than a hike, and dissented when they lost on it.
The Fed toughened its inflation language and markets flipped to hikes. "Somewhat elevated" became "elevated", which Scanlon calls unsurprising with the Iran war the fourth supply shock in 5 years. Traders had priced multiple cuts the day before and had rate hikes priced by that afternoon.
Incoming chair Kevin Warsh has campaigned against the institution he'll lead. The Senate Banking Committee approved Warsh that morning, and she says he will likely be confirmed before May 15, though "it's unclear." A governor from 2006 to 2011, he has called for "regime change", wants to shrink the $6 trillion balance sheet and wants to change how the Fed measures inflation.
Powell staying on as a governor breaks with usual practice. Departing chairs normally leave the Fed entirely. Powell said he is still worried about the lawsuits under way and wants the investigation into the Fed "well and truly over."
Scanlon reads the hawkish dissents as data-driven, not political. In her view the three dissenters weren't picking a fight with the president; with inflation up and the labor market weakening, the data left them no other vote.
Prediction markets are rife with insider trading, by design. The occasion is a US Army member who was insider trading on Polymarket. Scanlon says Polymarket's founder called this the whole purpose of prediction markets a few months ago, and the founder of Kalshi has said its purpose is to "financialize everything"; asked about it, Trump said the whole world "has become somewhat of a casino."
Matt Levine warns insider betting can create the events bet on. As she relays his column, the incentive could mean more abductions of foreign leaders, more wars and more volatility. He suggests disliked foreign leaders watch their Polymarket removal odds for a spike, and notes it distracts people who should be doing their jobs.
Scanlon argues the US has staked retirement and innovation on markets. Retirement has been "socialized" to the stock market, and innovation increasingly outsourced to VCs and private markets rather than government efforts like DARPA. Her worry is that the venture model of many small bets for one moonshot now shapes the whole economy.
A lottery-ticket society loses cohesion and long-term focus. In her reading, when everyone is hoping for one stock to go to the moon, or for a foreign leader to be kidnapped, interest in the shared future erodes. She calls that the cost of financializing everything.
Private credit is opaque, unregulated lending to companies banks won't touch. Senator Elizabeth Warren tells Scanlon that big borrowers get money either from tightly regulated banks or from private credit, which lends outside banks to relatively risky companies and is "quite opaque."
Bank lending to private credit routes the risk back to banks. The private-credit pitch was to keep risk out of the banking system, but the video says banks now lend to private credit firms, which lend to risky projects like AI data centers. If those loans go bad the losses return to the banks, the 2008 pattern that ended in a federal bailout; the captions don't mark whether this turn is Scanlon's or Warren's.
Retail savers are being pulled in without structural separation. The same turn notes the president signed an executive order opening 401(k)s and pension funds to private credit, while rules to separate banks from private credit are not being put in place.
Warren credits Glass-Steagall's walls with decades of stability. The 1933–35 reforms, the SEC, Glass-Steagall and bank regulation, built walls between kinds of financial firms so losses stopped at the wall. She points to more than 50 years without repeated crises, then Glass-Steagall's repeal in 1999 and the 2008 crash 9 years later, and warns risk is building again across lightly regulated banks and unregulated private credit.
Fed independence exists to make the unpopular call presidents won't. Presidents always want lower rates because they make the economy feel better in the short term, Scanlon says, but cutting when you shouldn't brings inflation later. Long Fed terms are meant to make officials serve the economy beyond a two- or four-year cycle.
Warsh argues the Fed has lost credibility and needs "regime change." At his confirmation hearing the day before the post, Kevin Warsh, a governor during the 2008 crisis and the Fed's main bridge to Wall Street then, said the Fed got 2021–22 wrong by leaning on backward-looking data. He also argued AI-linked productivity would let the Fed cut despite inflation worries from the Iran war.
Critics fear Warsh is positioning himself to please Trump. Trump has said publicly he wants a chair who will cut and listen to him. At the hearing Warsh would not say Trump lost the 2020 election, and Scanlon says he was not clear about his investments; she contrasts this with Powell's willingness to tell the president no.
Doubt about independence damages the Fed on its own. Because the Fed's credibility rests on clarity, she argues, even open questions about whether the chair is independent could substantially harm the economy.
A government stake makes the state a part-owner, not a lender. Spirit Airlines, struggling with higher fuel costs, is talking about the US government taking a stake. Scanlon distinguishes equity from a 2008-style bailout loan: an owner sits on the cap table, claims profits and may get votes, board seats and a say in mergers, layoffs and pay.
Spirit has no national-security rationale, unlike the Intel stake. The Intel stake was justified because chips are strategic; a discount airline is not. She reads Spirit's request as equity stakes becoming a general policy tool any big, distressed company can ask for.
Losing Spirit would raise fares, but owning it distorts incentives. Discount carriers keep the majors honest, so Spirit's exit would mean higher prices, fewer routes and less competition. A government owner, though, wants its company to win, which could mean shielding it from competitors or letting it raise prices, and it pushes companies to stay on the White House's good side.
The state is becoming companies' bailout tool of first resort. Tying it to her New York Times op-ed on markets expecting rescue, she argues the mere fact that Spirit asked shows the insurer of last resort is now the US government, and so the taxpayer.
The stock market has always been rescued, so it now expects it. Drawing on her New York Times opinion piece, Scanlon traces the "Greenspan put" from Alan Greenspan's support through Black Monday, to Ben Bernanke's zero rates and trillions in asset purchases in 2008, to the trillions deployed within weeks in COVID, after which stocks hit all-time highs within months.
Markets now demand rescue, as the 2013 taper tantrum showed. When Bernanke merely hinted the Fed might buy fewer bonds, the bond market threw what was called a tantrum.
The usual backstops are constrained this time. The Fed's Chris Waller, in a speech on transitory shocks, said markets are ignoring compounding risks, though his base case is a return to normal. In her view inflation means rate cuts could make things worse, and US debt levels put real limits on new spending.
Investors are pricing an "AI put" instead. The bet, as she describes it, is that AI offsets job losses, fixes energy and routes around the Strait of Hormuz, and survives supply-chain fights over chips made in Taiwan. She argues markets are so used to rescue that it is baked into earnings expectations, even if the war worsens or AI does not work out.
The market is buying every dip at a historic pace. Scanlon says that for the first time since 1928, the S&P 500 hit a new all-time high within 11 days of falling 5–10%.
Allbirds' AI pivot shows investors paying for the hype, not AI. The sneaker company, which IPO'd at a $4 billion valuation and just sold for about $40 million, announced a pivot to AI compute under a new AI name, and the stock rose almost 600%, to $19. Per Matt Levine at Bloomberg Opinion, an investor committed $50 million, only $5 million up front, convertible at $3 a share; she gives the result as $50 of notes converting into shares worth over $300.
Levine frames that deal as a repeatable portfolio strategy. Put $5 into each of 10 dead companies; if one rides AI hype long enough, convert, sell and cover the rest. She likens it to companies adding "blockchain" to their names.
The real systemic risk is a politicized Fed, which markets ignore. That morning Trump said on Fox Business he would fire Jerome Powell if he doesn't leave when his chair term ends May 15; Powell says he stays until the investigation into him and the Fed is over. Janet Yellen says she has never seen a threat of this level to the Fed, and Scanlon worries Kevin Warsh would cut under political pressure.
Scanlon concludes the market prefers fun stories to reality. Investors are excited about an AI shoe company, she says, while underpricing clear risks from the war and from the Fed.
AI is squeezing entry-level hiring, which hollows out future firms. Job openings are at their lowest since 2020, and a new Federal Reserve paper finds 500,000 fewer coding jobs than expected. John Burn-Murdoch in the FT attributes much of this to firms not hiring recent graduates, and another paper notes that without young hires a firm won't have senior people later.
AI is also polluting how people communicate. Scanlon cites Trump posting an AI-generated image of himself as Jesus, deleting it and saying he thought it was a picture of a doctor, as synthetic images becoming part of political mythology.
Americans distrust AI, fed by tech CEOs' job-loss rhetoric. The Stanford AI Index, out this week, found 64% of Americans expect AI to mean fewer jobs and only 5% more, and the US has the lowest trust of any country surveyed in its ability to regulate AI. It also found the US-China model gap has effectively closed and experts and the public sharply diverge on AI's future.
Firms may be replacing entry-level workers with AI that can't cope. She notes models win math competitions but aren't necessarily good at other skills, and that most chips are made by a Taiwanese foundry exposed to current disruptions. Her worry is harming a large part of the population on a false premise.
AI should be regulated like railroads and other transformative technologies. Pointing to the "after the crash" paper, she says it is time to start talking about solutions.
The inflation jump is an energy supply shock, not broad overheating. Inflation hit its highest in 2 years: headline 3.3% against core 2.6%, and Scanlon reads the gap as a supply-chain break in food and energy. About 20% of world oil moved through the Strait of Hormuz before the Iran war; flow is now about 8% of normal, and gas rose 21% in one month, the biggest jump since at least 1967.
The worst of the price effects is still ahead. Anything made with oil gets more expensive, she says, and the downstream effects haven't arrived yet even though headline inflation already hurts.
The Fed is boxed into what feels like stagflation. It can't cut into an inflationary shock it can't confirm is temporary, since a ceasefire could reopen the strait, and can't hike into an economy that is already softening.
Consumer sentiment hit a record low on compounding problems. She attributes it to high prices, a weakening labor market, energy costs, housing and systemic problems compounding since the pandemic, and calls the gloom partly self-fulfilling.
Anthropic's Mythos turns AI from economic savior into systemic risk. The model is reportedly able to find and exploit vulnerabilities in every major operating system and browser; the Treasury Secretary and Fed chair called bank CEOs in to warn them and plan. Anthropic limited access to firms including Apple, Amazon, Microsoft and JPMorgan under Project Glasswing so they could patch first.
AI spending is historic in scale and rests on thin revenue. AI investment was a significant share of GDP growth in the first half of 2025. Per Asad Ramzanali's "After the Crash" paper (Vanderbilt Policy Accelerator), spending by Alphabet, Microsoft, Amazon, Meta and Oracle is expected to outpace electrification and the Interstate Highway System, behind only the Louisiana Purchase and the railway boom's peak, all on customers like OpenAI and Anthropic earning tens of billions.
Ordinary savers are funding a bubbly, circular buildout. The money comes from stock, corporate bonds and opaque private credit, drawing on pensions and 401(k)s. Scanlon cites the AI bubble at 17 times the dot-com bubble, the Magnificent Seven at 30% of the S&P 500, and circular financing as the companies own pieces of each other.
An AI crash could be a contained bust or a systemic collapse. The milder scenario resembles the dot-com bust, when the Nasdaq lost 80% and Silicon Valley lost over 200,000 jobs. The extreme one takes down the whole economy, as in 2008, when 10 million Americans lost homes and 9 million lost jobs.
The paper proposes planning the recovery before any crash. Its ideas include a Glass-Steagall for AI barring model makers from owning data centers, a public cloud built from stranded data centers bought at fire-sale prices, and a digital Works Progress Administration hiring displaced knowledge workers to fix government technology.
Scanlon argues the tech industry's long immunity from regulation can end. One in four DC lobbyists works in tech, the industry has been largely unregulated for decades, and things move fast after a crisis. She frames the moment as a chance to decide what world to build afterward.
Markets bought the ceasefire as another Trump climb-down. That morning Trump tweeted that an entire country would die that night; after the close a two-week ceasefire was announced and buyers rushed into the S&P. Scanlon calls it the "TACO" trade, money waiting on the sidelines for Trump to chicken out.
Extreme rhetoric is costly even if nobody expects follow-through. She suggests Trump pushes rhetoric to extremes because he knows he isn't taken seriously, but allies do take it seriously. She sees the war following the tariffs' pattern of pauses and kicking the can.
Fiscal policy has little room to cushion the war's inflation. Money is going to defense, and the US can't function fiscally without other countries buying Treasuries, which angering them puts at risk.
The Fed can neither cut nor comfortably hike. Energy prices driven by the Strait of Hormuz will likely keep inflation rising, ruling out cuts if the economy struggles, while hikes would make things tougher. She expects the Fed to do what it can but says the US is less equipped for this shock than for COVID's.
Narrative volatility now feeds straight through to mortgages. The unstable information environment drives market volatility, which drives rate expectations and from there mortgage costs.
Jamie Dimon warns the American dream is slipping away. His 47-page annual shareholder letter says 23% of Americans make less than $17 an hour and poverty is becoming intergenerational, and proposes doubling the earned income tax credit. He also argues, citing Silicon Valley Bank, that some bank rules are so big and complex they make crises likelier, which Scanlon likens to the Oreo CEO saying everyone should eat more Oreos.
Dimon sees stagflation risk, with inflation "the skunk at the party." For 2026 he points to the Iran war pushing up energy, sovereign debt at all-time highs, and hyperscaler AI spending over $700 billion this year, which is inflationary in the short run.
Asset prices have outrun the real economy, and the gap must close. Household net worth is at 560% of GDP, against a 460% peak before the housing crisis, per the letter.
OpenAI proposes a policy package against AI displacement. It includes a public wealth fund seeded by AI companies paying returns to every citizen (an ownership stake, not UBI), automatic safety-net triggers tracking displacement, wage insurance and training vouchers, portable benefits, four-day-week pilots, AI access as a right, and AI companies paying for their own electricity.
Scanlon reads both papers as agreeing that policy lags. Wall Street and Silicon Valley alike are saying something has to change. Technology and jobs have changed and policy has not kept up, in her view. It's unclear who will push these policies, but she finds it heartening the big problems are finally being discussed.
Private credit funds are gating a wave of redemption requests. In the almost $2 trillion market, Blue Owl reported investors asked for 22% back from its main fund and over 40% from its tech fund, and capped withdrawals at 5%. Scanlon says Apollo, BlackRock and others are doing the same; because the loans are illiquid, funds can't pay everyone at once.
Fear that AI will disrupt indebted software borrowers drives the exits. Many of these funds lent riskily to software companies AI could upend, she says, and trust has eroded, Blue Owl's especially.
Life insurers' shift into private credit spreads the risk to everyone. Needing better returns on premiums held to pay claims and annuities decades out, insurers moved from government bonds into higher-yielding private credit. If it goes bad, the damage reaches insurers and through them ordinary policyholders.
The risk is a doom loop, though it isn't a crisis yet. Capped redemptions deter new investors; less new money means fewer loans, weaker returns and more people wanting out, which would hit the exuberant tech sector hard. She calls it something to keep an eye on.
Federal spending heavily favors retirees over children. The per-capita ratio is about 10:1. Penn Wharton research finds 62% of federal spending goes to retirees and 10% to people under 26: over $43,000 per retiree against $4,300 per child. The gap is expected to widen, with one in five Americans over 65 by 2040.
Ending the war without reopening Hormuz hurts the global economy. Trump says the strait needn't be open for him to declare the war over, Iran plans a toll, and Trump says other countries must secure their own energy. Markets rallied on that news; Scanlon argues a struggling global economy will drag the US down too.
Midterm pressure is shaping the administration's moves. As she reads it, the administration knows midterms are coming, with approval ratings extremely low, gas at $4 a gallon and Joe Rogan calling the war insane.
An expensive war leaves young Americans underserved again. Her first lesson is that the government is thinking short-term when an aging population demands thinking decades ahead, and the war's fiscal strain will squeeze spending on the young further.
Volatility like this makes the case for buy-and-hold. Her second lesson: time in the market beats timing it, so anyone not needing the money soon or retiring soon should hold tight, though she grants that is easier said than done.
The administration's war news is aimed at markets, not information. Scanlon relays the Iranian parliament speaker's warning that pre-market "news" is a setup for profit-taking ("If they pump it, short it. If they dump it, go long"), and says Trump then followed the pattern, posting on Truth Social before the Monday open a threat to destroy Iran's power plants, oil wells, Kharg Island and "possibly all desalination plants."
Market complacency is letting the war keep escalating. Her inference: the stock market is the thing the president pays most attention to, so because it isn't selling off hard, the war keeps getting worse; a harder sell-off would have produced a different situation.
The material reality contradicts the "deal is coming" narrative. She reports the Strait of Hormuz passing about six vessels a day against 135 in normal times, 80% of tankers getting through being Iranian or Iran-friendly, Iran's oil exports up 8% year over year almost entirely to China while Iraq's have collapsed more than 80%, and Iran formalizing a toll system for passage.
The war's main beneficiary is a rival, and America is hit last. Scanlon calls China the country best positioned and the war's main beneficiary. Citing a commentator whose name the captions garble, she says the pain reaches East Asia first, then the rest of the world, then the US; Goldman Sachs estimates the US economy will be hit roughly twice as hard as China. Her reading is that Iran seems to have the upper hand.
Escalation, not resolution, is what is actually on the table. The Wall Street Journal reported that weekend that Trump is weighing an operation to extract nearly 1,000 pounds of enriched uranium from Iranian sites, which she reads as US boots on the ground, while Congress is on a two-week recess until April 13 with DHS still unfunded. She predicts market manipulation works only up to a point, and that the current "immense complacency" lasts until markets wake up to what is happening.
Prediction markets sell themselves as tools of control. Coinbase pitches its product as a way to "take back control" and Kalshi as a way to make your grandchildren proud; Scanlon ties the appeal to 80% of Gen Z and 75% of millennials saying they feel behind and turning to speculation, which she frames as financial nihilism.
The promised control doesn't survive the payout numbers. The CEO of Novig, another prediction market, said only 20% of his users make money, and that this is higher than the rest of the industry.
We have moved into "belief capitalism," where value is narrative adhesion. Her sequence: old capitalism valued productive capacity, financial capitalism valued claims on future cash flows, and now value comes from keeping people inside a story long enough that it stays load-bearing. The gap between what is promised and what is delivered is the extraction.
The manosphere, prediction markets and the White House message alike. She places the manosphere at the center of these belief markets, full of vice signaling and extraction, and says White House messaging is very similar. Her formula: optimization is the process, control is the desire, and "agency" is the branding.
Expect repeated bids for control, because despair sells. She predicts more of these bids as a response to financial nihilism, citing Raymond Williams that despair is extremely convincing and profitable, while hope is the opposite.
The social media addiction verdict treats a symptom, not the problem. A jury found Meta and Google liable for harming a young woman who says she was addicted to Instagram and YouTube as a child, awarding $6 million, with Meta owing 70% and Google 30%. Scanlon notes it is the first verdict of its kind, many similar cases are pending, and both companies plan to appeal.
The lawyers targeted design features to get around Section 230. Rather than the content, which Section 230 protects, they argued that infinite scroll, autoplay, push notifications and beauty filters caused her anxiety, depression and body dysmorphia; she started on YouTube at 6 and Instagram at 9, and the jury agreed.
Damages won't change the product or the business model. Her argument: a wave of lawsuits doesn't make any kid safer, and with Meta spending hundreds of billions on AI this year the fees are a rounding error. She stresses the companies still deserve scrutiny, citing internal documents in which employees called Instagram a drug ("we're basically pushers") and Zuckerberg overruled a beauty-filter ban, against expert advice, over revenue.
Kids on screens is partly an economic policy failure. She argues screens become a babysitter because parents work more hours, child care is unaffordable and schools are underfunded, paralleling gambling as a response to financial nihilism: both vices fill structural gaps in economic path and connection. She calls for holding companies accountable and fixing those gaps, and expects the case to raise questions about internet freedom and age verification.
The market shrugged off the ultimatum, expecting another climbdown. Trump gave Iran 48 hours to open the Strait of Hormuz or lose its power plants, and Sunday-night futures barely reacted. Scanlon attributes this to the "TACO" (Trump always chickens out) theory, which creates reflexivity as people buy ahead of the expected climbdown, but argues this situation is hard to chicken out of.
Treating AI megacaps as a war-time safe haven is "pie in the sky." The Mag 7 and the broader S&P 500 have decoupled, with their correlation turning negative, and investors assume the Mag 7 will simply trade differently. She counters that AI is extraordinarily reliant on energy.
Investors are betting policymakers will protect the market, especially AI. Her reading: the market is seen as something that must be supported because everyone's 401(k) is in it and as the thing that stops Trump, and investors expect AI firms with government contracts to be most protected. She calls this a drift toward state capitalism, citing Trump's investment in Intel.
A market detached from reality is shaping the war itself. She grants the counterargument that markets look ahead to the war ending, with people already insider trading on Polymarket over the end date, but concludes that if markets responded more to actual events, events would probably be different.
A poorly planned war is being messaged through memes. It said that day it may have to lift sanctions on Iranian oil, which Scanlon reads as proof the war "was not thought out at all," with pain for energy markets over weeks to years. Politico quoted a White House staffer saying "our job is just making banger memes, dude."
Taking comfort in allies' pain is vice signaling. JD Vance said Americans should find comfort that allies are suffering more than the US from high gas prices; she cites Robert Shrimsley in the Financial Times that vice signalers profit in the outrage economy by playing the villain.
The administration's messaging is essentially manosphere messaging. She compares it to Andrew Tate's "you're in the Matrix, it's all a scam, join my course" pitch, which resonates in a tough economy, and cites Benjamin Fogel on Tate as a symptom of capitalism without illusions about progress. She grants some truth to a "scam economy" since the financial crisis, but says more and more Americans are disagreeing with the war.
The meme strategy will likely stop resonating once real prices bite. Her prediction: the pendulum swings back, because extreme digital messaging is now bumping into higher gas and food costs for people who have faced high prices since the pandemic.
Holding rates shows how stuck the central bank is. The Fed held rates that day with core inflation running around 3%, and Powell said roughly half to three-quarters of that comes directly from tariffs, which the Fed cannot fix. Scanlon notes the effect of the pending Supreme Court tariff decision is unclear.
The oil shock rules out both a cut and a hike. The war pushes oil up, raising inflation while lowering growth; the Fed can't cut while oil spikes, and can't hike without further pressure on a labor market she says is suffering partly from tariffs. One voting member, a Trump appointee whose name the captions garble, voted to cut. The dot plot still shows one cut this year and one in 2027, and Powell said no inflation improvement means no cut, counter to Trump's demands.
The chair is staying until the investigation is resolved. The DOJ is investigating a Fed building renovation, which Powell earlier called politically motivated retaliation for refusing to cut on presidential demand; his replacement, Kevin Warsh, won't be pushed through until it is resolved, so Powell may be chair longer than expected.
Expect high borrowing costs and steady policy for about a year. She expects mortgage, car loan and credit card rates to stay high and shipped goods to cost more with gas; Powell said insurance costs keep rising and it will take a while for people to feel better about the cost of living. Her forecast: barring "something wild," stable monetary policy decisions over the next year or so.
Cities and states face a squeeze: raise revenue or cut spending. Scanlon says New York City is among the first to hit a budget shortfall, with Mayor Mamdani's administration appointing chief savings officers to close the gap. She attributes the tightness to federal cuts to programs states administer but Washington funds (Medicaid, housing assistance, education), war-driven inflation risk, and federal plans to cut taxes further.
The mayor's main lever is a tax on high earners. He has proposed raising taxes by 2% on those making more than $1 million a year, which needs New York State approval; if it isn't approved, he is talking about raising property taxes.
Taxing high earners doesn't drive them out, she says the data show. It polls very well, and despite the rhetoric about flight, high earners usually stay, and revenue from those who stay typically exceeds what is lost from those who leave. She expects New York's debate to spread across the country.
A second, unidentified speaker argues for a more progressive tax system. In a clip after a speaker change, that voice calls for giving more people free necessities such as child care and health care, a higher minimum, and paying for it through progressive taxation.
"America First" can't finance itself without the rest of the world. Drawing on her New York Times piece, Scanlon says the US spent roughly $7 trillion last year and collected about $5.2 trillion, a $1.8 trillion gap, and that Trump is now actively asking other countries for help with the Iran war.
The debt becomes a weapon against the US if rates rise. The US must refinance at whatever rates prevail, so if the war pushes rates up, servicing costs climb; she notes interest payments have recently outpaced defense spending.
The trust behind the dollar's exorbitant privilege is eroding. Investors have historically fled to the dollar in uncertainty because the US was stable, but she says geopolitics and better alternatives to Treasuries are challenging that, with others "circumnavigating" the US and talk of weaponizing US debt. Her forecast: if trust goes, the cost shows up at home in a government that can no longer afford its ambitions.
The White House's main war strategy is AI-generated video. Scanlon says it mixes video-game material with real bombing footage; in response the Chinese Embassy in the US posted an AI cartoon about eagles and the Iranian Embassy in the Netherlands a Pixar-style story about what is in Trump's head.
Spectacle government rewards spectacle because seriousness requires accountability. Her chain: accountability needs consequences, and consequences need institutions willing to enforce them, which she says is not the case now. The performance has shifted from "competent steward of public trust" to WWE-style dominance, as in Trump's interview with Logan Paul.
The messaging is economic because it targets nihilism. She ties it to zero-sum thinking and declining upward mobility: when people feel they have no stake in the system, you sell them winning rather than competence.
Both sides are now trying to destroy each other's economy. The US struck Kharg Island, Iran's main oil export terminal, and Iran threatened any American-linked energy facility in the region and, per the captions, called Ukraine a legitimate target, which she says is how wars spread.
You cannot meme through disruption already hitting the US economy. Mortgage rates are climbing, and the administration is reportedly discussing trading oil futures directly to suppress prices, which the CME Group CEO called a "biblical disaster." She reads government intervention in pricing as a sign there is usually no other option.
Reserve releases can't come close to replacing Hormuz supply. The US holds about 415 million barrels in Gulf Coast salt caverns, and with the Strait of Hormuz, which carries 20% of the world's oil daily, closed, the IEA's 38 member countries agreed to release 400 million barrels, 172 million of them from the US. Scanlon compares the daily loss (captioned as "11 to 16 barrels a day," unit dropped) with a US release rate of "one to two," and concludes that even every country releasing at full speed falls well short.
Reserves buy time; real supply takes investment. She says stockpiles are for stabilizing prices in a panic, not a substitute for supply, which requires building out and relying on other energy sources; the IEA acting at all shows how severe the Iran war is.
Markets are grasping at any sign the war is ending. Scanlon says a post that day, tied in the clipped opening to the Secretary of Energy, claimed the US Navy had escorted a tanker through the Strait of Hormuz; it was not true, yet oil swung heavily, because markets "desperately want to believe in TACO."
The war, AI and private credit risks are linked through energy. Citing a Bloomberg piece on market cracks widening as the three collide, she argues the war raises energy prices, and the AI build-out depends on energy for data centers; the stock market needs the war over to keep rising.
Private credit adds pressure and lands on unshielded retail investors. She says private credit depends on stocks rising, software companies doing well and a stable economy, and sits in mom-and-pop portfolios that lack institutions' shields. Her forecast: energy probably gets more expensive, the AI expansion may not work out as expected, and private credit's "very questionable decisions" add a layer of pressure on the economy.
No measure will dent gas prices while the strait stays closed. Oil has made about a $40 round trip, up to $120 and back to $80, and Trump says the war will end very soon, talks of removing sanctions and is exploring options to tame gasoline. Scanlon argues none of it matters much if the Strait of Hormuz remains closed.
The "TACO" playbook works on tariffs, not on a war. "Trump always chickens out" worked with the Liberation Day tariffs because, she says, they weren't real; a war spreading to neighboring countries and global energy prices is something he can't chicken out of.
The president times his war messaging to market hours. She says he is very responsive to the stock market: while it was open he said the war would end "real soon," and after the close that it "might be just beginning or it might just be ending." Markets closed up that day on hopes the war was ending, but after hours told a different story, and she says it remains to be seen whether he can calm markets for long.
A weakening labor market is the backdrop for the gambling boom. That day's jobs report showed tech jobs basically in recession (per Joey Politano's charts), a decline in healthcare employment, which had been propping up the labor market, a falling participation rate, and declines in manufacturing and construction, the sectors tariffs were supposed to save.
Young people are prediction markets' prime targets. Scanlon's three takeaways from a Wall Street Journal piece on college campuses: young people gamble at extraordinarily high rates, platforms target them because they are willing and able, and they mainly use the platforms to find ways to insider trade. Students said it "feels kind of illegal but it's not," and she says the CFTC is taking a hands-off approach.
Prediction markets push money incentives to their moral endpoint. Betting on the leader of Iran being ousted, or on people dying, aligns every incentive with making money, which she says creates moral confusion; she grants a role for contracts like weather hedges.
Weak jobs split people between the trades and risk-taking. Some go risk-off into the trades (the WSJ's "tool-belt generation"), others embrace prediction markets, crypto and sports betting, amid posts boasting of millions won betting on whether Trump would say a word. Her forecast: as the war continues and energy and food prices rise, more people will turn to gambling instead of work.
Low social trust makes the US a perfect target for meme governance. A new Pew study asking adults about the morality of others in their country found the US is the only place where most people see those around them as bad. Scanlon says the US treats everything as reality TV, as in the White House posting memes about the war.
Government spectacle only works when the economy is good. Her chain: memes work when people don't trust each other, distrustful people fall for spectacle, but spectacle depends on a strong economy, which she says is no longer the reality.
Economic headwinds will catch up with the memes. She lists soaring crude shipping costs feeding into energy and food prices, uncertainty over AI's labor impact with no trust in anyone to manage it, apparent insider trading on prediction markets, and very high government debt. Since energy is the foundation of everything, her open question is whether you can meme your way through it.
South Korea's whipsaw shows the exposure US markets are shrugging off. Scanlon says South Korean stocks sold off almost 20% the previous day and recovered 11% over the session; the country ships much of its energy through the Strait of Hormuz, is highly leveraged, and has a leader, a former day trader, who encouraged people to move money from homes into stocks.
US index weighting makes the market feel insulated from the war. The S&P 500's largest companies by market cap are AI companies, which investors feel are insulated, but she argues they are exposed through energy prices.
Passive 401(k) flows keep money in even as risk rises. Automated investing means people don't sell on new risk, though she notes withdrawals from 401(k)s are running at the highest rate in a long time, a sign of economic concern. Her reading: the US market takes a long time to register that anything is wrong.
The energy shock lands on Europe and Asia first. The shutdown of a Qatar LNG plant will push up energy prices for Europe and Asia, and she expects the US, as an LNG exporter, to benefit in the short term. She sees opportunity running dry with fertilizer being held up during planting season.
Market coverage flattens the war's human cost into a chart. Scanlon opens by stressing that people are dying and families are being torn apart, with no clear end, alongside the economic story.
Markets are whipsawing on grand but unclear administration promises. Since US and Israeli strikes on Iran began over the weekend, the S&P 500 fell as much as 2.5% on Tuesday before closing down less than 1%; Brent rose more than 10% in two days and European natural gas hit a three-year high. Gold fell, which she says could mean investors unwinding positions to raise cash, and the dollar rose.
The war is an inflation shock arriving just as inflation cooled. Energy touches nearly everything that moves, and if oil stays around $90–100 a barrel, she says it could put a lot of pressure on the US economy.
The tanker-escort pledge calmed markets, but the outcomes are wide open. Trump said the US will escort tankers to their destinations, which she calls another grand and sweeping promise; the range of outcomes is enormous, as the administration itself has said.
A closed Hormuz pushes oil higher the longer the conflict lasts. Oil is already up 20% this year, about 20% of global oil flows through the effectively closed Strait of Hormuz, and Scanlon says prices will keep rising if this lasts more than a couple of days. The administration's timeline has stretched from four days to a couple of weeks, and it now calls it a war.
Prominent voices see war inflation keeping the Fed on hold. Former Fed chair Janet Yellen said the Iran situation puts the Fed even more on hold, and Jamie Dimon said higher inflation could be a "skunk at the party" for an otherwise healthy economy.
The market on Iran's leader exposed prediction markets' death-bet problem. Death markets are illegal in the US, so Kalshi, a registered US operator, couldn't pay out if the leader left through death, only if he left office or was replaced; Polymarket, outside the US, ran a death market. Users angry that Kalshi hadn't made this clear forced it into refunds.
Suspected insiders profited from the strikes. She cites about six suspected insiders making $1.2 million on inside information about the Iran attacks, and says neither the prediction markets nor the administration knew what they were signing up for.
She argues the attack increasingly looks illegal. In her view, rules exist to avoid situations like the weekend's prediction-market mess, and Congress exists to stop presidents from doing things like this.
The Pentagon's demands on Anthropic appear tied to an imminent attack. Scanlon's reading is that the Pentagon sought the power to surveil people and use fully autonomous weapons because it was planning a strike within 24 hours; the US and Israel then launched a coordinated missile attack on Iran, aimed at its nuclear program, which the government had said the previous attack took care of.
Government shouldn't be able to dictate to private companies like this. She argues the episode also implies the government is likely using AI models for surveillance and autonomous weapons, and that OpenAI signed a Pentagon deal after Anthropic refused; she says Sam Altman appears to be bending the truth in denying that OpenAI accepted the same terms.
Punishing Anthropic risks the AI-dependent market and economy. Anthropic sits in a circular financing chain with OpenAI, Nvidia, Microsoft, Amazon and Palantir, so if it can't do deals "everything kind of falls apart"; she also expects investors and users outside the US to shy away from US AI products that must comply with government demands. She calls allowing Nvidia to ship chips to China a bigger national security risk than Anthropic.
Strikes are escaping accountability from both Congress and markets. She notes the attacks keep landing while markets are closed — almost 25% of Saturdays this year — and that a war powers resolution vote on Iran is due next week. Oil is up 20% this year and she expects it to keep rising; she says a lot of money was seemingly made on insider bets on prediction markets.
Anthropic invoked American values the country itself is undermining. She counts this as the seventh country attacked since Trump took office, against his campaign promises and weeks after the "board of peace" was set up, and calls it a war the public does not want and the president refuses to explain.
The American economy is reversing a long era of dispersion. With Netflix walking away from the Warner Brothers deal, Scanlon expects Paramount to get it, consolidating media further, including CNN; fewer players means less price competition, and she flags Paramount's vested interests with the administration as complicating it.
The government is pushing to concentrate control of AI too. She reports Anthropic told the Pentagon on the day of the post that it won't allow use of its technology to surveil citizens or for autonomous weapons, and expects Anthropic will likely suffer consequences.
Markets reward walking away from deals and cutting workers. Netflix stock rose because, in her view, it doesn't need the deal; Block rose 25% after saying it would fire half its workforce citing AI efficiencies, though she notes speculation that Block simply over-hired post-pandemic.
AI is becoming a justification that erodes labor's bargaining power. Citing Sam Altman, she expects many companies to use AI as a reason to shrink headcount, and reads the theme of the moment as concentrated economic power, weakening workers, and no clarity over who is in charge.
Nvidia's earnings were good and demand keeps accelerating. Scanlon calls Nvidia essentially the foundation of the US stock market; she quotes Jensen Huang saying computing demand is growing exponentially, and ties it to personal AI agents such as OpenClaw replacing a variety of websites.
AI demand is colliding with a constrained data-center supply side. Microsoft, Meta, Amazon and Alphabet are projected to spend up to $670 billion on AI infrastructure this year, yet US data center construction fell for the first time since 2020, which she attributes to permitting, zoning and power delays plus political pushback over electricity, environment, noise and land competing with housing.
Consumers are pushing back against platform dependence. She cites a revival of DVDs, Blu-rays, vinyl and CDs, with video stores reporting higher rentals and foot traffic, as people say they want to own things rather than pay platforms for access.
The market depends on a buildout that politics and power now limit. Her expectation is that Nvidia and the market likely keep doing well, but that this level of pushback is something to watch through 2026.
The Pentagon–Anthropic standoff is a live test of AI alignment. Anthropic refuses two uses — surveilling citizens and autonomous weapons — while the Pentagon threatens to invoke the Defense Production Act or blacklist Anthropic from business with military contractors, which Scanlon notes is a surprising number of companies. Other labs, such as Elon Musk's xAI, seem on board with the military's terms.
Who should own and profit from AI remains unresolved. She points out Anthropic settled a $1.5 billion lawsuit for pirating 7 million books and faces a $3 billion suit over torrenting 20,000 songs, while complaining that DeepSeek and others are distilling Claude for their own models.
AI's real business impact is still unknown despite market swings. Anthropic's releases have repeatedly hit the stock market, which treats AI as disruptive to software, while Deutsche Bank said on the day of the post that AI will be a layer on top of software; she adds that some are calling for a pause on data centers and it's unclear all the committed capacity is needed.
Government is intervening, but probably not in the needed way. She cites rising public pushback, including Jamie Dimon saying the AI issue has to be handled by "business and government." A second, unnamed speaker closes the clip asking whether constitutional rights, such as the First and Fourth Amendments, need to be reconceived for AI.
A hypothetical AI doomsday essay overshadowed a real private-credit warning. The sell-off was widely linked to a 7,000-word weekend piece imagining AI-driven mass unemployment and collapse by 2028, which Scanlon says many found internally inconsistent since the Fed and fiscal policy would respond.
Blue Owl's moves shift risk rather than resolve it. She reports Blue Owl Capital permanently gated one of its funds last week and sold $1.4 billion of loans, some to an insurance company it owns; its stock is down a lot, within a private credit market of two trillion dollars.
Blue Owl is losing on both sides of the AI trade. As the largest lender to private-equity-backed software firms, its bet on sticky legacy-software customers is undercut by Claude and ChatGPT letting companies build cheap tools; meanwhile it is betting big on AI infrastructure, which McKinsey estimates at $5 trillion through 2030, so slowing AI investment or disappointing returns would make that leverage very uncomfortable.
The market is questioning what counts as a safe investment. She adds tariff uncertainty, with FedEx suing over the tariffs as illegal, and suggests the next decade may call for a different investment strategy than people used to believe.
The Supreme Court struck down the tariffs on separation-of-powers grounds. In a 6–3 decision it ruled the 1977 International Emergency Economic Powers Act (IEEPA) doesn't let the president impose sweeping import taxes, since the Constitution gives taxing power to Congress; Scanlon stresses it wasn't a ruling on whether tariffs are good or bad.
Tariffs fall by roughly half but stay historically high. Citing the Yale Budget Lab, the average effective rate falls to 9.1% versus 16.9% had IEEPA tariffs stood; she expects prices still to rise from remaining tariffs, companies not to lower prices they already raised, but less risk of further hikes.
Refunds could become a transfer from consumers to corporations. Over $200 billion was collected since Liberation Day, roughly $140–175 billion tied to IEEPA, and companies are suing to get it back; if firms get refunds without cutting prices they passed on, she argues consumers paid for nothing, and the refunds also carry a fiscal cost.
This isn't the end of tariffs, but adds friction and checks. The administration has signaled it will keep tariffs via other tools, though it can no longer use IEEPA on fentanyl or immigration grounds; her inference is that visible constraints on executive power should provide some long-term stability for markets and foreign economies.
An aging population holds the wealth and drives the deficit. Citing Greg Ip's Wall Street Journal piece, people 70 and over control about 40% of household-owned equities and mutual funds versus 22% in 2007, and elderly programs are the primary driver of the budget deficit, implying higher taxes or lower future benefits.
GDP is booming while the labor market stagnates. Scanlon describes a jobless recovery driven by corporate spending, with hiring paused over tariffs, health insurance costs, or the belief AI can do the job — though she says it's not clear AI is useful outside software engineering.
Nobody is driving the car on regulation. She points to the CFTC head threatening to sue states that try to curb prediction markets, and AI spending racing ahead with no regulatory path and no guarantee it works.
The coming wealth transfer may be consumed by elder care. She cites an $84 trillion intergenerational transfer that could be eaten up by care costs around $10,000 a month, and notes Gen Alpha is about half the size of Gen Z.
She sees openings in tech backlash and young voters. Her reading is that tech backlash has already begun and younger people are turning out in big numbers, as in Mamdani's New York City race.
Federal cuts push a fiscal reckoning onto cities. Shared programs — education, Medicaid, housing assistance, food — fall to cities and states when federal funding shrinks; Scanlon notes Congress has resisted many announced cuts, but tax cuts still mean cuts to health care and food aid and trillions added to the deficit.
Cities must balance budgets, leaving three tools. Unlike Washington, New York has to balance every year; cities can borrow for long-term capital projects, raise taxes, or spend more efficiently. New York City's mayor announced that day a plan favoring taxes on the wealthiest over property taxes.
Taxing the rich will spread because wealth is so concentrated. The mayor's team showed a chart of Wall Street bonuses, and she expects many cities to start debating redistribution as budgets tighten.
Efficient spending is not austerity. She defines austerity as cutting during a downturn to satisfy creditors, notes its main academic justification contained basic spreadsheet errors and the IMF admitted underestimating the damage to growth, and contrasts it with cutting waste; she argues the federal government cuts some spending while spending more than ever elsewhere.
Young people priced out of homes are investing instead. Scanlon calls this aspirational displacement, citing a Wall Street Journal analysis: Americans 18 to 39 were 51% of home buyers in 1999 but 44% in 2025 per Redfin, while the share of 25- to 39-year-olds making annual transfers to investment accounts more than tripled from 2013 to 2023.
Rising costs and a shrinking labor share push people toward capital. She points to high mortgage rates, home prices and down payments, tariff- and insurance-driven price hikes, and labor taking a smaller share of gross domestic income; with capital this powerful and investing easy on a phone, she argues the American dream is shifting.
The AI trade is getting paranoid enough to be stupid. A tiny former karaoke company that pivoted to AI logistics in 2024, with about $2 million in sales, touted its AI platform and logistics stocks sold off — the same pattern Scanlon says hit real estate, software, alternative asset managers and financial services.
People want AI to be sentient, and that inflates the hype. She expects AI to be powerful and change work in good and bad ways, but notes the Moltbook excitement over AI agents posting about the meaning of life turned out to be humans mimicking AI.
The risk is the capital cycle, not the technology. Citing an analyst's new paper, she argues spending is so large that returns will compress and financial conditions tighten, so the investment boom stops and reverses, as in telecom and Chinese real estate.
Speculation and nostalgia together leave the present stagnant. She sees a "let it rip" stance from the CFTC on prediction markets, crypto and sports betting mirrored in absent AI policy, while AI trained on the past reproduces nostalgia; with one force pulling to the future and one to the past, the present stalls.
The jobs report was decent on top but narrow underneath. The economy added jobs, unemployment ticked down and wages grew, but almost all growth came from healthcare and social services, which Scanlon ties to an aging population; she notes the administration had oddly messaged it would be much worse.
Outside care work, it's a low-fire, low-hire labor market. Data-center and infrastructure construction held up, finance and parts of tech struggle, and government payrolls shrank substantially; small businesses face high rates, tariff and AI uncertainty, and fewer quits slow replacement hiring, so jobs are hard to find even with low unemployment. Last year's job growth was also revised down significantly.
This is a maintenance economy, not an expansionary one. Growth is carried by care work and physical buildout rather than broad expansion; AI displacing white-collar work hasn't shown up in the data, though hiring of young graduates is much softer.
Entitlements loom as the bill for an aging country. She cites the CBO's 2026 outlook and Social Security expected to run out in 2032, and says the administration is apparently inflating the debt away while offering "little treat" policy concessions; her verdict is no recession, but no boom.
AI spending, industrial renaissance and tax cuts should prevent recession. Scanlon cites Torsten Slok of Apollo on these three pillars, and reads the Super Bowl, where almost a quarter of ads came from AI companies, as support for the first; AI firms are dominating both stock and bond markets with massive debt issuance though nobody knows exactly what AI will do.
AI can't create anything new, which deepens a nostalgia loop. She argues AI synthesizes inputs well — coding, organizing — but struggles to invent original work, and that the nostalgia-heavy Super Bowl ads reflect a culture repeating itself, which makes economic growth hard past a point. She quotes Mark Carney that "nostalgia is not a strategy."
Growth requires moving the economy beyond just AI. Hope and imagination are what move past nostalgia and AI limits both, she argues, so AI's money may keep the economy propped up while exacerbating the cycle.
The rebound reflects buy-the-dip faith that AI complicates. Scanlon says retail investors assume the market always goes up and the bounce was credited to a resilient economy and healthy earnings, but the labor market shows serious problems; the market keeps cycling through AI fear sell-offs, such as after Anthropic's legal assistant, and buybacks.
An AI economy could grow without a strong labor market. She sketches a world of 4% growth, rising productivity and falling inflation as the labor force dries up — but with consumer spending at 70% of the economy, people who lose work can't buy what corporations sell.
No recession this year, but the social contract is at stake. She expects government spending and AI investment to put a floor under the economy this year; if the AI labs' promises come true, growth would come through capital intensity rather than labor participation, and she doesn't think an economy can work without people.
Silver fell because it was an overbought, crowded trade. Scanlon attributes the drop to too much momentum prompting selling.
Tech is rotating to defensive sectors over AI fears for software. Despite Nvidia's CEO saying software will always matter, she says many see software as overbought, and asset managers' heavy software exposure spreads the fear.
Bitcoin lost its hedge story as financial claims on it multiplied. Products creating many claims on a fixed 21 million coins undermined its protective narrative, she argues, while forced liquidations and margin calls added downside momentum.
A weakening economy and a steepening curve signal uncertainty. Layoffs have surged to a 17-year high; the 10-year yield is rising faster than the 2-year, which she reads as rate cuts priced in at the short end and investors demanding compensation for uncertainty and less confidence in falling inflation at the long end.
Anthropic's legal tool sparked fears AI disrupts whole software industries. Scanlon says the release led investors to sell legal, healthcare and financial software companies, and asset managers sold off second-order because of their software exposure.
Private equity's software bets carry crisis-like risk underneath. Private equity has put $444 billion into software over the past decade at valuations sometimes 60 times earnings, and business development companies make high-interest loans to junk-rated mid-size firms to fund dividends for regular investors; she cites First Brands as an example of the fallout.
Public reassurances between AI partners read as defensive messaging. Oracle tweeted that the Nvidia–OpenAI deal has zero impact on its relationship with OpenAI, which she likens to a "questions answered by my shirt" message, and says Sam Altman claiming the US is falling behind is what he says when things aren't going OpenAI's way; Nvidia still seems set to invest $20 billion.
Media that performs authenticity and channels rage captures audiences. Scanlon draws on McLuhan's "the medium is the message" and the films A Face in the Crowd (1957) and Network (1976), and sees today's front-facing camera videos by politicians and podcasts as the same performance, amplified by algorithms that reward rage.
People repeat the same financial mistake of overbelieving a story. She points to the Moltbook episode, where AI agents seemingly built their own Reddit and talked of escaping, as evidence people want AI to be sentient because they are betting trillions on it working.
AI money tied up in data centers may not pay off. Citing Bloomberg, she says AI is already the whole stock market and increasingly the bond market, with a big risk the technology evolves past the need for data centers; whether AI is internet-scale or labor-market-transforming, she says she doesn't know.
One new chair cannot deliver rate cuts alone. Scanlon reports Trump has nominated Kevin Warsh to replace Jerome Powell, over Kevin Hassett (chair of the National Economic Council) and BlackRock's Rick Rieder; she stresses that rates are set by the FOMC, where Warsh would get one vote of 12 and several voters are skeptical of cuts.
Cutting from worry differs from cutting for more growth. She contrasts Governor Waller, who voted for a cut at the previous day's meeting and published a note citing worry about the labor market, with Trump, who wants lower rates because he thinks the economy deserves to grow more; Trump says Warsh will cut "without White House pressure," but Warsh would still have to persuade colleagues who take inflation credibility seriously.
A Trump-appointed chair would likely prioritize propping up markets. Her reading is that markets are the one governance tool, because Trump responds to falling stocks and rising bond yields, so Warsh's job will likely be to push for cuts and keep markets rising; she notes this is at odds with shrinking the balance sheet, and expects the institution itself to resist the cuts.
The nomination may stall in the Senate. She reports that members of the Senate Banking Committee have said they will approve nothing until the Fed lawsuits are resolved; she reads the nomination as another test of power that shows the administration's direction on monetary policy and a potential loss of Fed independence.
Federal Reserve, Gold, the Dollar, and the AI Trade
The Fed sees no need to cut and will hold. She reports Powell describing the economy entering 2026 on firm footing, with solid growth, resilient consumer spending and a stabilizing labor market, and arguing policy is no longer restrictive; her reading is the Fed won't move again until it has to, though Governor Waller was one of two votes for a cut.
Powell is defending Fed independence under political pressure. She notes he called the Supreme Court case over Governor Lisa Cook, whom the Trump administration has threatened, the most important legal case in the Fed's 113-year history, and warned of a tremendous loss of credibility if the Fed is not independent.
That credibility loss is already showing in the dollar. Treasury Secretary Bessent says the US has a strong-dollar policy, but she says Trump has made plain he likes a weaker one and is getting it, as trade wars, Greenland and demands on the Fed push people out of the dollar; she argues a weaker dollar helps exports and manufacturing short-term but hurts Treasuries, how the US finances its debt, and could add to inflation.
Markets now want AI earnings, not just AI spending. She reports Microsoft lost more than $400 billion in market value after a big jump in AI-related capital spending and slower growth, amid worry it is too tied to OpenAI and about circular financing; she adds that people appeared to sell gold to cover tech losses.
The flight to commodities reflects falling trust in the system. Her inference ties gold, copper and silver buying, dollar swings and Powell's independence warnings to the end of the cheap-money narrative and a push to justify fundamentals; she expects US full faith and credit to persist in some form, but says markets are signalling they trust the system less, at tremendous cost.
The mayor frames the budget as values and investment, not just costs. In the interview (the captions mis-render the guest's name as Eric Adams; the title and his own criticism of "Mayor Adams" make him Mayor Mamdani), he says a budget must reflect New Yorkers' actual needs beyond the legal requirement to balance two fiscal years at a time.
The city faces a huge budget gap he blames on his predecessor. Scanlon puts it at an estimated $12 billion and attributes it down to years of structural choices, especially underbudgeting by previous administrations; the mayor says it eclipses the Great Recession-era gap and attributes it to "gross fiscal mismanagement" under Mayor Adams.
The city gets back far less than it sends to the state. The mayor says the city contributes about 54.5% of state tax revenue but receives about 40% back, and that correcting this would have brought the city an additional $8 billion a year.
His fix is higher taxes on top earners and profitable corporations. After the city does everything in its own power, he proposes raising taxes on the top 1% of New Yorkers by 2% and on the most profitable corporations by amounts neighboring states have used.
A funded city shows up in crisis response. He cites the recent heavy snowfall, when sanitation put 2,500 workers on each 12-hour shift to plow every road, as evidence of what budget investment buys, and says a balanced budget should prepare the city for the next challenge too.
What Would It Actually Look Like to Cap Credit Card Rates?
Card rates climbed after a court ruling ended usury caps. Americans carry $1.2 trillion in card debt, about $6,400 per person, at an average 21%, up from 16% five years ago; she says most states capped card rates at 10–12% into the 1970s until the Supreme Court's 1978 Marquette decision let banks move to states like Delaware, South Dakota and Utah and charge any rate nationwide.
Banks earn enough from cards to absorb lower rates. Citing a September Vanderbilt Policy Accelerator paper built on Federal Reserve profitability data, she reports banks make about $120 billion in interest and $162 billion in processing fees such as interchange, about 30% of it pure profit; the paper argues interchange, not interest, funds rewards.
Moderate caps would cost banks little, per the paper. At 18%, banks would still earn more than double the average bank return on assets, with consumers saving $6 billion a year and no impact on rewards or lending; at 15%, nearly every credit tier stays profitable and Americans save $48 billion a year.
The proposed cap would deliver huge consumer savings. At the 10% recently proposed by President Trump, savings would be roughly $100 billion a year, which the paper equates to a $1 trillion tax cut over 10 years without adding to the deficit; banks would likely cut rewards for customers with FICO scores below 760, but those customers would still save three times more in interest than they lose.
The industry's claim that risky borrowers lose credit is contested. Against the lobbying line, the paper notes credit unions have operated under an 18% cap for decades and that Capital One and Amex each outspend Nike on advertising, fat it argues could be cut instead; she says the deadline on Trump's cap has passed and the question is political will.
Reality-TV governance has hit its limits over Greenland. She reports Trump has backed down on Greenland, saying a framework of a future deal is in place, and argues you cannot govern a superpower like a reality show.
Global trust in the US underpinned the Great Moderation. Tracing a line from Reagan's General Electric Theater to his presidency, she says the roughly 40 years from the mid-1980s of low inflation, stable growth and rising assets rested on a bet that the US would defend allies and not abuse its power, which supported the dollar and safe US assets.
Long calm bred the risk-taking that ended it. Invoking Hyman Minsky, she argues calm drives financialization, bubbly asset prices and debt until something breaks, as in 2008, after which central banks restored stability.
Spectacle worked in Trump's first term but not now. Her reading is that low rates let markets shrug off his first term, but higher rates, soaring debt and strained trust make them less forgiving in this "great entertainment" era; on Greenland, invasion talk, AI images and tariff threats brought falling stocks, rising Treasury yields and a weaker dollar.
Markets, not Congress or the courts, are now the guardrails. She argues this holds because Trump measures his show's success by the stock market and bond yields.
Canada's prime minister declared the rules-based order gone. She reads Mark Carney's speech at Davos, from a former head of the Bank of Canada and the Bank of England, as seeking an alternative to US instability, including partnering with China; she traces this candour to Powell's earlier warning about threats to US monetary stability and expects more officials to speak out.
Reality-TV politics must keep escalating to hold attention. Her inference is that the administration's Greenland threats and AI images of US control over Greenland and Canada follow a show's logic, so actions will get weirder and more intense.
A Japanese bond sell-off is lifting yields globally. She reports 40-year Japanese yields passed 4% for the first time on worry over the new leader's fiscal plans; as yields and volatility rise, the yen carry trade (borrowing cheap yen to buy higher-yielding assets abroad) unwinds and pushes yields up across the board.
Greenland escalation is the second source of market stress. She reports Trump saying there is no going back on acquiring Greenland, threatening tariffs on European countries in the dispute, and threatening 200% tariffs on French wine because Macron won't join his $1 billion board of peace; she cites gold up 75% "this year" as the reaction.
Squandering the US's privileged position misunderstands American strength. She closes on Carney's message at Davos that the "pleasant fiction" is over, arguing the US's position is a great privilege it risks losing.
Americans pay nearly all of the tariffs. She cites new research that about 96% of the cost of recent US tariffs fell on Americans and about 4% on foreign exporters; importers pay at the border, and the cost flows through as higher prices, lower margins, lower wages or delayed investment.
The Greenland push looks like a personal grievance. She reports Trump's weekend letter tying Greenland to not receiving the Nobel Peace Prize, and argues the security rationale fails because the US can already deploy more troops there without taking it over.
The "trophy" is costing the US in markets and alliances. She says the dollar is slipping as "sell America" returns, and that Europe, like Canada, is looking for ways to route around the US economically.
Congress holds the real authority and should use it. She argues Congress controls tariffs, oversight and war powers, so it can force transparency on who pays and limit tariff authority used as a coercive foreign-policy tool; if territorial threats go beyond economics, its constitutional role cannot be left to markets.
US volatility is pushing Canada toward China. She reports the two countries pursuing joint trade agreements, joint investment and visa-free visits, and infers that Carney, a former head of both the Bank of Canada and the Bank of England, sees China as the better partner on tech, drugs and renewables.
Much of the administration's rhetoric will not hold up. She points to Congress already rolling back many of Trump's federal spending cuts and a pending Supreme Court decision on tariffs that could upend the administration's plans, while noting the law is slow to catch up.
The Fed chair's candour was the turning point for policymakers. Her reading is that Jerome Powell speaking plainly about what is happening woke others up, but too late to stop a China–Canada alignment that could undercut the US's new world order.
The economy being built works for few and cannot last. She calls the affordability policies economically questionable from either side of the aisle and frames the open question as whether institutions catch up to reality.
All three economic levers are being pushed at once. Drawing on a Wall Street Journal piece by Greg Ip, she lists fiscal stimulus (tariff checks, big tax cuts), loose credit (record dividends and buybacks, loosening capital requirements, falling barriers to bank mergers, rolled-back consumer-finance enforcement) and a Fed on a rate-cut path.
Rate cuts are becoming a political mandate for the next chair. She calls the threat to Fed independence very bad, since Trump has made clear he wants cuts from whoever leads the Fed.
Maxing every lever trades short-term gains for long-term damage. She relays Ip's conclusion that this risks leaving future generations poorer, a debt crisis and a market blow-up.
Investor views on stability split. She contrasts BlackRock's Larry Fink, who says the US will grow above trend and investing is safer than a year ago (which she attributes to BlackRock's money parked in the US), with Schwab's Liz Ann Sonders urging diversification in portfolios and skills ahead of AI.
2026 may stay stable, but the Great Moderation is over. She expects many to see a broadly stable 2026, but argues that drawing on every source of stimulus at full force leaves little in reserve, marking the start of a period of uncertainty to prepare for.
Why Does The Market Go Down When Economic Data is Good?
Stocks fall on good data because markets expect tighter Fed policy. Responding to that day's Trump speech claiming the Fed raises rates to kill great numbers, she explains the market drops on strong data because it fears the Fed will act against inflation from an economy running too hot.
Trump sees a scoreboard; central bankers see an engine. Her framing is that a politician wants every number winning all the time, while the Fed and peers like the Bank of England must step in when the economy overheats.
The Fed's room is tight because growth is narrow. Under its dual mandate of price stability and maximum employment, she says, growth relying on AI, constrained housing and a constrained labor market means small missteps could spark an inflation spike.
The stock market is detached from fundamentals. She argues much of its gain is driven by AI and companies that have never made money, with nobody knowing whether AI will work; Trump's speech confuses what stocks reflect (AI) with what the Fed manages (a labor market reliant on healthcare jobs and an economy reliant on data-center spending).
Rising markets need steadier fiscal policy, not Fed-blaming. Her conclusion is that if Trump wants stocks up, the interventionist approach has to go, and the speech blames the wrong people for the wrong problems.
Credit Cards at 10% + $200b in Mortgage Bonds + the Federal Reserve
Markets shrugged off the DOJ threat to the Fed out of complacency. She asks why stocks didn't react to the Fed being threatened with criminal indictment, which Powell tied to its refusal to cut; relaying a Wall Street Journal reporter's three guardrails on Fed independence (markets, the Senate, the courts), she attributes the calm to "TACO" and notes the Supreme Court is about to hear the Lisa Cook removal case.
The Senate and the establishment are pushing back. She reports many senators saying they won't advance Trump's Fed chair nominee unless this is resolved, and former Fed chairs and Treasury secretaries jointly warning that such pressure is how monetary policy works in countries with weak institutions.
Bond markets can defeat a politicized push for lower rates. She explains the Fed sets short-term rates, but investors set the 10-year yield that drives mortgages and loans; if policy looks political, the risk premium rises and long rates stay high even if the Fed cuts, and she notes bond vigilantes have toppled governments, as in the UK.
The affordability moves could backfire. She argues Trump's 10% credit card cap would cut costs for those with balances but make credit much harder to get, and that buying $200 billion in mortgage-backed securities would raise housing demand and prices without fixing the shortage of homes.
If the guardrails fail, expect markets to reprice. Her conditional forecast: if the Senate backs down, courts allow removals and a successor is installed in this climate, expect higher term premiums, a weaker dollar, higher inflation expectations and higher US borrowing costs; she argues stable markets are the one thing that delivers affordability.
Fed Chair Jerome Powell and Central Bank Independence
The criminal threat stems from refusing the president's rate pace. She reports Powell's statement that the Department of Justice served the Fed with grand jury subpoenas threatening criminal indictment, which he calls a consequence of setting rates on its best assessment of the public interest rather than the president's preferences.
Fed independence underpinned the Great Moderation. Scanlon argues the central bank's separation from government over the past 40 years kept politicians from forcing easy money, and that if investors believe rates can be set by political pressure, inflation expectations, bond pricing, dollar credibility and risk premiums all shift; she says that is why gold rallied and the dollar slipped.
The chair vowed to keep doing the job independently. In the clip he says he has served under four administrations of both parties without political fear or favor, focused on price stability and maximum employment, and will keep doing the job the Senate confirmed him for.
SF Fed President Mary Daly and Richmond Fed President Tom Barkin on their 2026 economic outlook
Solid growth could coexist with a stagnant labor market. Asked about job growth concentrated in healthcare and social services and growth partly driven by AI, San Francisco Fed President Mary Daly says 2026 could bring reasonably solid GDP growth with a labor market just moving along; she says healthcare growth reflects a rapidly aging population, that a diversified economy is needed to absorb workers, and that a gap between solid growth and a flat labor market can form around an exciting new technology amid uncertainty.
AI investment and wealthy consumers' spending are linked risks. Richmond Fed President Tom Barkin says wealthy consumers are outspending others, supported by a stock market whose gains are narrowly concentrated in AI-linked tech; if the AI frenzy eases, investment and valuations get cut together, hitting both of the economy's engines.
There is also stimulus and resilience on the upside. Barkin notes substantial stimulus coming into the economy, and one of the presidents says the surprise has been the economy's resiliency rather than its precariousness.
Recent recessions came from shocks, not gradual drift. One of the presidents says perpetual recession-callers are stubborn forecasters rather than good ones, noting that over the last 40 or 50 years recessions followed sudden events like the pandemic, Lehman Brothers, 9/11 and the Iraq war.
A calm stock market is being treated as permission. She argues that because markets are seen as the arbiter of truth, Trump's Greenland threats and the national security strategy's talk of redrawing spheres of influence are read as harmless so long as equities don't sell off; she ties the Greenland interest to the strategy's focus on rare earths China has invested in.
Stocks keep rising through instability for structural reasons. She points to the AI trade and the 401(k) system's steady automatic bid under the S&P 500, a flow that only stops when things get extremely bad, even as the strategy document envisions conflict and uncertainty replacing the Great Moderation.
Bond vigilantes still discipline reckless governments. She cites the UK under Liz Truss, when gilt markets revolted and policy was reversed almost immediately.
Volatility is migrating to prediction markets. She says some of the first movement around Venezuela showed up in betting markets, where insiders appeared to trade on expectations of conflict, and that payouts are subjective: Polymarket says it can't pay out on an "invasion" of Venezuela because it wasn't technically one.
Markets still judge, but their signal is cloudier. She reads the dollar sell-off and China's buying of gold reserves as searches for alternatives to US policy, but says it has become hard to tell what truth markets are reporting.
Finance moved in on Venezuela immediately after the intervention. She cites a Wall Street Journal article on the finance industry eyeing investment opportunities there and a Financial Times piece on US oil companies and investors circling pipelines, refineries and crude reserves.
The "Donroe Doctrine" revives US dominance of the hemisphere. She explains Trump's play on James Monroe's doctrine, originally Europe out of the Americas and the US out of Europe, which became US control of the Western Hemisphere; Trump implies Europe, China and Russia should stay out and repeats that the US needs Greenland for national security.
War gets priced instantly, but there is no governance plan. She argues capital is already arriving while no state-capacity solution exists, a gap she calls a structural US problem; she warns the fallout spreads, since Cuba gets most of its fuel from Venezuela and faces shortages and blackouts.
State power and private wealth are deeply entangled. She points to a person quoted in the Journal saying the new government must accept foreign direct investment on day one, and reads the episode as a push and pull between capital and capacity in a likely multipolar system.
The US seized Venezuela's president, apparently for oil. She reports the US removed Venezuelan President Nicolás Maduro and brought him to the US to face drug and weapons charges, and infers oil was the primary motive, noting Trump repeatedly says the US will be very involved in Venezuela's oil industry.
The operation bypassed Congress and international law. The administration cites the president's Article II authority to protect US personnel, but she notes Congress holds the war power and held no vote, with Marco Rubio saying there was no time to consult; she says the UN charter bars force against a sovereign state except in narrow cases, and governments across Europe, Latin America, China and Russia warn of a dangerous precedent.
The precedent weakens US objections over Taiwan and Ukraine. She argues that if the US can seize foreign leaders at will, it cannot object when China or Russia does the same.
The drug rationale clashes with Trump's own pardon. She notes that weeks earlier Trump pardoned a former Honduran president convicted in US court as one of the hemisphere's largest cocaine traffickers; she adds the 1989 Panama invasion as precedent for removing a leader on drug charges.
Oil can't pay for running Venezuela in an oversupplied market. She says the global oil market is deeply oversupplied and US producers don't need more barrels, so Trump's claim that oil revenue will cover running the country misreads supply and demand; she also notes he now says the Nobel Peace Prize winner he appeared to back lacks support to lead.
Wall Street's 2026 thesis is capex plus policy support. She reports most banks are bullish on the US, expecting AI-dominated capital spending on data centers and chips to continue through 2026, alongside expansionary fiscal policy and Fed rate cuts that are expected to come cautiously because inflation is not fully gone.
Banks expect gains, but slower ones, because valuations are stretched. She reports a large cluster of forecasts putting the S&P 500 between 7,400 and 7,800 by year end, short of the pace of the last 3 years mainly because US large-cap tech is already expensive by historical standards.
The recommended play is diversification beyond AI builders. Firms point to sectors tied to AI adoption (industrials, utilities, power, logistics, financials, healthcare), non-US markets like Japan and emerging markets, and gold pitched as structural insurance rather than a big money-maker.
A buy-and-hold icon's exit may mark a changing economy. She reads Warren Buffett stepping down as Berkshire Hathaway CEO, a figure of buy-and-hold success in a growing economy, as a sign his successor inherits a different one.
She expects gains but advises staying diversified. Her own view is that markets will keep rising and AI stays productive, but that Fed cuts and heavy government spending come while growth beyond AI is limited.