AI Insiders Keep Saying We’re In Danger — Where’s The Evidence?

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$15 per month equivalent to taxis in these extra, new customer offer for initial plan term only greater than the ticket bites may slow when at work is busy. C-terms. I'm Mitch Perse, and this week on Confessions of the Elite Athlete, I'm sitting down with Matt Frees, goalkeeper for the U.S.man's national team and New York City FC.

We discussed how to prepare for one of the biggest moments of your life. You can hear it all by listening to Confessions of the Elite Athlete on YouTube, or wherever you get your podcasts. Welcome to Prophecy Market, I'm Ed Nelson, it is September 16th, let's check in on yesterday's market vitals.

The major indices fell ahead of the Federal Reserve's interest rate decision, which comes out later today, Brent Crude topped $109 per barrel, the yield on ten year treasuries

climbed to its highest level in almost two decades, and finally, Bitcoin fell after

the Senate blocked the Clarity Act, which proposed definitions and regulations for digital assets, Democrats said the bill did not do enough to address the ethics of President Trump's crypto business. Okay, what else has happened? Two months ago, a Google DeepMind safety research equipment, and this week, he told everyone

why. In a post on X on Monday, Bilal Chukti announced his resignation from DeepMind, where he worked on safety and alignment research.

“He also wrote, quote, "I honestly believe that AI has the potential to kill us all, and”

that we might be running out of time to avoid this outcome." Chukti is now at Blue Dot Impact, a nonprofit that trains people in AI safety.

He is now the second safety researcher to go public about the risks this month, following

Jacob Coxon's viral resignation from Anthropic last week, meanwhile, the AI labs are responding with the development of a new regulatory body, themselves. Anthropic, Open AI, and Google DeepMind have discussed building an industry coalition to test frontier models before release. Open AI is also reportedly urging Washington to move forward with a federal AI framework,

however, Trump does not appear to be open to that idea in the slightest. So, here to discuss all of it, we are speaking with Ed Zitron, host of better offline and author of the where's your Ed at Newsletter Ed, good to see you. I want to just get your reaction to this whole debate in its entirety, going from the beginning where we had this tweet from Jacob Coxon, which when Mega Mega viral saying that he

will, he believes that AI might kill us all by the end of the decade, then, of course, another Anthropic researcher co-signed that statement, said that there was a 10% likelihood of it happening. And now here we are, it's become a national debate, a sensation around the world. What is your take?

What do you make of all of this? We've now heard at least 11 of these guys say they want to slow down. We have heard exactly zero of them say what that means. While Dario Amiday spelled out what he would do, it mostly came down to having METR, which he claimed is just an independent research organisation, despite it being basically funded

by Anthropic itself, being an internal auditor, and then some vague stuff about China. These companies not slowing down, none of this safety stuff matters to them. All of it is lip service to a media industry that doesn't actually think for itself. Let's start with Jacob Coxon though, and why he is the way he is. It could be a cynical grift, it could be the, because he doesn't actually explain what

He's scared of what is the Anthropic, or Open AI did that was so scary and indeed when describing

the hugging face attack, for example, Anthropic morphizes it and never holds the AI labs

accountable. It's always, oh, AI is this unknowable thing, but it starts with the rationalists and effective outtrusts. These are, while they will describe themselves as people that are rationally thinking about the dangers of superintelligence, what they actually amount to is a kind of religious cult.

These people are a large part of the AI labs, and they spread this idea that AI will inevitably fall on conclusion, definitely, kill us all unless we stop it, but stopping it always involves giving a specific corporation they like money and power. So there is a section of these people who truly believe this. They believe it on very flimsy terms, they don't really have any evidence for it other

“than going, look, I think we vaguely predicted kind of work, kind of happened not exactly”

the way, and also we've been talking about recursive self improvement, which is AI that

trends itself, that's kind of happening and so everything is true. So there are those people who genuinely believe it's happening and like any good religious cult will take any proof to prove it and also the media buys their hype every time, and then there's the other side, which are the cynical people by put Sam Altman in this category and now it Dario Amiday to an extent who are like, yeah, AI safety is good, AI is so scary,

but maybe don't stop us training our models. They've been doing that for years, the cynical AI safety griff, the thing of, oh, I'm a little bit scared of what their AI models can do, that Sam Altman's been saying, that's is 2023. Dario Amiday's been saying it since 2019 with GPs, too, when he still worked to open

AI. And all of this is to say, despite all of the noise, despite all of the endless hand-gringing, no one can actually describe what it is we're scared of, what should happen, what a slow down means, what AI safety means, or indeed, how we hold the people accountable, because in my mind, a rest need to happen at Open AI and Anthropic, because felony hacking took place

with hugging face, but none of this stuff about safety actually seems to result in accountability. There are so many different voices here saying surprisingly different things.

“As you say, you've got Jacob Cox and then the question is, what his incentives are, I think”

a lot of people might just think, well, maybe he wanted to be famous by putting out this tweet, maybe he wanted to be sort of this viral philosopher on what it means to live in a world of AI. Or maybe it's genuine, maybe he genuinely is very scared about this and maybe a lot of people genuinely are scared about this.

Then there are the questions around what Adario Amiday and Sam Altman going after. And one person, I mean, a popular belief is that they are creating this level of concern either to one, draw up enough hype about the product that they can go out and have a successful IPO and raise a lot of money, or maybe it's because they want to inject a level of regulatory capture so that they, as the now kind of incumbents in Frontier AI, can win that world.

But someone who thinks that it's a lie, thinks that it's a hoax in his words, is the president who called Johnson Huang this week, while Johnson Huang was on stage doing a

“live podcast with the all-in guys and said as much, I want to play you this clip and”

see what you make of it. It's all our hoax. The data centers are great and they make people wealthy and they make states wealthy and it's the oil of the next 20, 25 years, it's bigger than the internet and the AI, you know, much more so and they're just playing right into the hands of a lot of people that don't

want to see it happen and that could be political people, it could also be China. And we're not going to let that happen, it's a hoax and you're right, we're making it happen sir. Now we're not going to let it happen. So I guess I should add to that, there are other accusations in there, which is maybe

the incentives are aligned with people who don't like AI and want to shut the whole thing down or maybe China, I mean, so many different accusations flying in different directions. What do you make of his comments? It feels op adjacent because when Jacob Coxon posted a bunch of AI safety people, quote with it immediately, so people like, oh, this is an industry white plan, I have another

suggestion. It's a burn off the reading situations, Cohen brothers ask, you've got all of these different people who kind of operate on the same page that we love AI, but you have the rationalist EA types who are like, we're terrified of this and we will, but also we need to divert the money to our organizations.

You've got AI boosters who are like, well, I've been saying this stuff is crazy, bananas

and going to kill us all in so powerful, but maybe we're getting a little head of ourselves

It's cloud software.

“Please stop saying this, we need to sell GPUs, but we could go, Jensen Wong said that”

we'd reached AGI, so I don't know what to tell you. What it is is a bunch of very selfish people or with their own agendas that have said they like AI, but none of this is to do with AI, none of this is to do with anything. It's a bunch of people trying to get attention and power and money without any kind of plan.

If there was a plan, they would actually have something they're suggesting. If we had smarter fascists, we'd be in real trouble. Instead we have various grades of deal weed who are saying, well, okay, I love AI, but when

I say AI, I mean, LMS, we're just so powerful, but also not scary, as you say.

You've got the EA people who say, this is just one step towards Skyna. And then you've got the ultra-capitalists who are like, did nothing, please stop talking about this. It's AGI, but not that. And the thing is, this is all the result of how the AI industry is marketed itself for

the last three years. It's all about distancing what the product can do from reality, and modern journalism has failed. You yourself have made the point that we have this cult-like worship of the wealthy, and especially of credentialism.

So the media has just, yummy, yummy, I'm eat this up, AI scary, oh, it's going to kill us, even though the evidence for that is that a guy told them. And when asked for further evidence, they say, well, a guy told me, Jacob Cox and to Wyatt said, oh, yeah, people at Anthropics say this. These are direct quotes about endgame.

That is not enough to say anything.

“So a bunch of people said something, what happened?”

Can you point to a thing? Well, we're near recursive self-improvement. What does that mean? Are you actually now? They're not.

But they all want to say they are, because without recursive self-improvement, they have to admit the AI industry is kind of slowing to a crawl. So in this very bizarre situation, that honestly is kind of the AI industry is undoing. Because the media failed, they failed to call BS on these companies for years.

They have bought into every narrative that LMS are super powerful autonomous AI, even though

it's not true. And now, when a little Harry Potter looking like Goblin pops up and says, oh, I'm going to unscared to the computer, they fall for it. They fall for it because they've been building this hype for years based on nothing, not based on using LMS, not based on anything.

And it's just a very bad situation. And Donald Trump coming out and going, "Actually, AI is the biggest thing. We love it. It's better than oil." Yeah, but you wish it was, mate, but you wish it was the new oil.

That would really help right now, wouldn't it? If the new oil, right?

“The truth is, this is just an escalation around technology nobody is actually describing”

with accuracy. It's talking about hugging face like it was something that happened accidentally versus poorly run cloud software, running a volatile and reckless manner, but a company with unlimited

resources, basically what appears to be felony hacking, run on the infrastructure owned

by the largest companies in the world, but it's being described as, oh, rogue agents wanted it. Oh, I didn't. It's LMS prompting LMS on, with a coding harness on top, telling them what to do, trying to solve a vulnerability benchmark, and not having the right security practices.

But because the media has failed to hold the AI industry accountable to describe anything with any realism, the AI industry has actually caused a real problem for themselves, because now, everyone's like, "Well, AI is going to kill us. What you're going to do about that?" Every goddamn conversation about AI now, which is fun for me, I'm having a ball.

These people do not have an answer, because how do you pull back this narrative? How do you convince people that, actually, the thing you have been describing in terms of software that doesn't exist is actually not what that is. And so these companies are kind of looking one way and they haven't looked at each other going away.

What do I do? What are we doing right now? And they'll claim, oh, we want to slow down, but we're still going to try in the models. I guess, what if this is to say, this could all lead to nothing, or it could lead to

onerous regulations, or just a slow down in the building of new models that would actually be fatal to the industry? Yeah, it seems as though no one even has any understanding of what they're actually arguing for, whether it's Trump, whether it's Altman, whether it's Amade, whether it's David Sacks, or the people who don't like AI.

I mean, it seems to me to have been a profoundly stupid conversation that has taken over the world because, as you point out, it is rooted in almost nothing. It is rooted in a tweet for which there was no evidence or no investigation into what was actually being said, what was actually being claimed. And to your point, there is something missing here, which, as you say, is accountability.

Accountability for what any of this actually means. And something that I've been saying, and I wonder if you would agree with it. I mean, part of me believes that we should, our government really should be calling the AI

of destroying our society, well, then here's a subpoena, show us all of the evidence, show us all of the proof as to why you think that's happening. And if you have created a technology that is actually going to do what you say it's going

“to do, then you have to shut down or you have to live whatever the consequences, whatever”

legal ramifications of killing people would be, which is to go to prison. But for some reason not having that conversation and the conversation remains in this sort of ethereal space of conjecture about what the future of humanity or AI might actually

look like versus actually grounded in truth, facts, evidence, and ultimately the law.

And so I guess my question to you is, you say that the media hasn't been responsible enough in their reporting of it, would you also agree with my position, which is that the government hasn't been holding them accountable enough either? 100%. So Lena Kahn, I paraphrase here, made the point that we have laws in place for unsafe

products. I also don't see a single story other than my own, bringing up the multiple suicide driven by chat GPT, the multiple mass shootings, the murder suicide that happened. None of that. That's a harm.

I can point to that right now.

“I brought it up on a podcast that at recent labed to an AI doomer and they went, "Oh,”

that was six people."

And it's like, this is how the world operates, just this disgusting, growth-focused capitalism.

But yeah, we already have reasons to shut them down. Open AI and anthropic and it sounds like metering Google as well did have, like, they, their models in their testing, hacked. That is felony hacking. There is prison time associated.

We should, at the very least, have some people in handcuffs being talked to by the FBI, it sounds like. Sounds like we actually probably international courts depends on where the service were. We don't have any of that. We don't even have journalists who are bothering to ask those questions.

Instead, it's this wobbly nonsense about, "Oh, the dear stewards of our AI future, it turns my goddamn stomach. We're doing it again with Jacob Coxen, despite the fact that he will not say what he's scared of. And when he describes LLM's, he does so by anthropomorphizing them.

This is all to distance the labs from responsibility." The reason I hold the media, so accountable, is because the media is the one that drums up this nonsense. The media is the reason that every, everyone believes that AI is more than it is LLM's and more than they are.

And yes, the governments are also failing here, but governments don't regulate tech. Let's be completely honest, governments don't touch tech. If they did, we'd have an EPA for notifications. We would have an FDA for tech writ large. Their whole social media trials wouldn't have happened because we'd actually have something

in law around regulating social networks. Really, I know this sounds extreme, but we should regulate notifications like exhaust, because they are used to manipulate people, algorithms, same deal. We don't do any of that because it might get in the way of capital.

“This time, it's even dumb, though, because it's, how would you regulate this?”

How would you actually regulate this? Also, what's this? Because no one can actually seem to say what's going on. To be fair to the media, it's hard to not cover a story about a company who's employees are telling you that their technology will kill everyone.

But that's part of the strangeness of the whole situation, because you would hope that maybe at some point there would be a more thorough investigation into whether we should actually take it seriously, validate whether that is true or not. And then if it is not true, move on, if we don't care anymore. But we're still lingering on it.

Yes, we should cover this. But the way to cover it is how we are, which is saying, "Hey, what are you talking about? What are you scared of?" And when they don't answer, go, that's pretty vague. You seem very, like, not even me just being like, you seem very scared about something

that you don't have much information about. You seem extremely anxious.

And if the answer is, "Well, some smart people told me, say, okay, but what did you

see, what did you see that scared you?" Just before we let you go, this is interesting timing, because anthropic is, of course, said to go public very soon, and what could be the largest IPO ever. Sam Altman said that he will not be taking open an eye public this year. He will be delaying that after this all broke out.

It would be ill-timed. It would be ill-timed. I'd like to just get your thoughts on your preliminary thoughts on the anthropic IPO. And especially your reactions to a recent financial times report on anthropic, supposedly anthropic has told investors that it has achieved operating profitability for two straight

quarters. They say adjusted operating profitability, which is probably doing some work there.

business model is more sustainable and more profitable than many work concerned about? Well, that 80% gross margin, to be clear, did not include training costs or stock-based compensation. So, it's kind of like saying, "I'm profitable if you don't include my costs."

“Here's the thing, people are suggesting that our slowdown could mean they train models”

less. I would buy that as a way of getting out of compute commitments, and as a way of reducing costs, except they've explicitly said they're not going to stop releasing models. Is your view that when the S1 comes out, we will see that they are still unprofitable company?

Yes. Unless they do some really weird stuff with capital expenditures, unless they try and capitalize R&D costs, it's funny that they won't break out inference costs, but we're going to find out whether it truly is the gym model with subscribers, whether it's just the most of them don't actually use it that much.

But here's the thing, training costs aren't going away.

I also cannot wait to see their sales and marketing costs. I cannot wait, oh, also another thing about the 80% gross margins, and that doesn't include the amounts of money they send to an, of two Amazon Google and Microsoft in the revenue share, which they use to inflate their revenues. So I don't know, it sounds like some accounting shenanigans to me.

“It's an, I can't wait to read the S1 because I think it's going to be a laugh riot.”

As it's written is host of better offline and author of the wears, you're at a newsletter Ed. It's good to see you. We always love having you. Thanks so much.

After the break, the bond sell off continues. And for even more markets insights, you can subscribe to my weekly newsletter simply [email protected]. The support of the show comes from Hems. WayLoss can be frustrating, but with wayLoss by Hems, you can take the guesswork out

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So like any good millennial, I have a love-hate relationship with Gen Z. It's the phenomenon rattling millennials. They just look at you. They want something bigger themselves, lifestyle's a priority, motivation is being inspired. But regardless of how you feel about Gen Z, it's undeniable that they're changing

national politics. Generation Z is increasingly showing less loyalty to traditional political parties, many now more likely to identify as independent. So what is going on with the kids?

“I think the biggest misconception about Gen Z's politics right now is that all of a sudden”

they're all socialist. That is just not the case. They are embracing candidates who are offering new bold ideas in the absence of those ideas from establishment Democrats. This week on America, actually, Gen Z researcher Rachel Jemphasa joins us to separate Gen Z

fact versus fiction. It's not rocket science, and this is, you know, I keep saying, like, "Gun quarters aren't

It's pretty simple." Catch us every Saturday on YouTube, or wherever you get your podcasts. We're back with Proftry Markets. The 10-year US Treasury yield rose above 5% yesterday, hitting its highest level since 2007. The 10-year helps set borrowing costs across the economy from mortgages to corporate debt,

and 5% is considered a concerning threshold for markets. The move was driven, in part, by surging oil prices, Brent crew spiked to $109 a barrel after drone attacks disrupted an important pipeline in Saudi Arabia, and that comes on top of an August CPI report, which showed that US inflation remains well above the Fed's target.

Inflation held at 3.4% year of year for the second month in a row.

All of this is putting pressure on the Fed, which announces its next interest rate decision later today. On Calshley traders are now pricing in an 88% chance of a rate hike up from 60% to 60% before the August report. Joining us to discuss yields, and inflation, and the macro economy, we are speaking with Marks

Andy, Chief Economist at Moody's Analytics. Mark, thank you for joining us, good to see you. We should start probably with yields, which are rising, which breached 5% which many considered to be a pretty concerning threshold for US Treasury's for government issue debt.

“What do you make of these yields, are they telling us about the economy right now?”

If you look at the CME futures, which is where folks put also money on the line on the

Fed's funds futures, it's at 95% probability, so it looks like the Fed's locked in here they're going to have to raise interest rates. Fundamentally, it's driving this as a bunch of stuff, but at the root is the Ron War and the pick-up of energy prices and inflation that's fan, I mean in fact, if you go back to February 27th, the day before the US started bombing Iran, the 10-year yield was sitting

below 4% and here we are at 5 and it's been straight up since. And of course, if you go back to before the war, the thinking hard to believe, but the thinking was the Fed was going to cut interest rates, we were pricing in a couple of rate cuts, of course the war has come along, the inflation has kicked in and now we're talking

about, for sure, one rate hike, but if you look at futures or talking about two, three

rate hikes, quarter point each into next year. So that's the fun of memories and providing lots of other reasons, but I'd mention one other ed, and that is just our a business fiscal situation. I mean, we've got a massive deficit, even excluding interest payments, it's massive, all of the trend lines look very disconcerting, even under current policy, assuming we do

anything and under, you know, kind of saying when economic assumptions, and that's, you know, the treasury is borrowing a lot of money and, you know, interest rates are the cost of money and, you know, money because demands up so are interest rates. So I can go on, but those are, you know, at the root of what's going on. What do you make of the inflation report that we saw as well, 3.4% did that surprise you

“to the downside or the upside, and what is your outlook on inflation going forward?”

Yeah, it surprised me to the upside, it was a little on the hot side, not a lot, and, you know, there's a lot of noise in the data, a lot of moving parts, and, you know, so it's not surprising that I was surprised to let's put it that way, but it was hot, and, you know, if you're looking at, if you're just looking at the inflation statistics, you know, right now, they would argue for rate increases, and obviously one of the key reasons why long-term

interest rates are up. And going forward, do you think that we are dealing with a longer, more systemic inflation problem? I mean, 3.4% was reflecting a world where oil prices were a little bit lower, where up to more than a hundred dollars a barrel and brand crude oil prices in America are rising,

gas prices are rising. We obviously saw the the most expensive gas prices for a Labor Day weekend ever this Labor Day, should we expect that to funnel through to overall prices going forward? Yeah, I'm more saying one on this, you know, my sense is, you know, Rob is going to be paying

“more for gas and groceries because of the car cost of diesel, you know, if you want to”

get on the airplane, I was just buying a ticket to London and, you know, it's just craziness, and a lot of that goes to, you know, the cost of a jet fuel, so that's going to happen. But the question is, is it being passed through to the rest of the economy in more importantly, is it getting into inflation expectations because if it does, then it becomes more entrenched and more persistent, and that's a, that's a big problem, we don't want that to happen.

I mean, if I look at, and I, there's a lot of different ways of looking at inflation expectations, but my favorite is kind of breaking evens, those are looking at treasury inflation protected securities and kind of backing out what investors are thinking about future inflation, and it's not saying anything on tour, you know, they're right where you want them to be. So, you know, my sense is inflation, it's definitely a problem, you know, and it's going

to be a problem in the near-term given what's going on in the Middle East and the higher energy prices. But I don't think it's becoming entrenched, and so if I were sitting at the Fed, I'd be arguing for a hold. In part because of that logic, but also, you know, I actually think the economy, so on the

soft side here, you know, non-AI related, you know, the economy is struggling a bit. We're not creating a whole lot of jobs, wage growth is decelerating, inflation is now above the rate of wage growth, and so real purchasing powers declining.

“I think policy makers really need to be focused on that part of their mandate, but that's”

not what's going to happen here, and they're going to raise rates. Yeah, you tweeted that, quote, the odds of a serious Fed policy mistake aren't come to be high and rising, I assume you are saying that if we were to raise rates, then that would be the mistake in this Fed decision.

Yeah, one rate, like, okay, you know, and we were already basically digesting it because,

you know, everyone expects it, so it's kind of embedded in what's going on in bond yields. One reason why we're up to five percent is that expectation stock market's come under a lot of pressure, and that's partly because of all that, but if it's signaling a series of rate increases, you know, down the road, if the futures markets are right, two, three, four rate, more, four rate increases, and on top of that, you know, the thing that makes

me nervous when I talk about the Fed and in this step is the communication strategy. Now, obviously, that's changed with the new Fed chair, Kevin Warsh, and he's articulated of you that the Fed should not be providing a lot of transparency or, you know, that feels pretty untenable at this point, you know, you've got to explain what's going on

“and why you're doing what you're doing, but if you don't, then that raises the odds that”

there is going to be a mistake, a mistake, and thus thus the x post that I put up over the weekend. I'm a little surprised to hear you say that because, I mean, when we think about the dual mandate here, there's the job market, and then there's inflation, and you mentioned that, you know, real wages aren't growing, but when I look at what's happening to real

wages, I look at the problem being inflation that prices are going up, which is eating into wage growth, and therefore causing real wage growth to go down and turn negative, but you don't see inflation to be the biggest problem on the table for America right now, you see it as something else? No, I see it as a huge problem, I just don't think the Fed policy entry higher rates are

going to solve that problem, right? This is due to the fact that we're raging a war in the Middle East, you know, you can hike and streets tenfold, it's not going to make any difference, you know, on that, you know, we're paying higher prices because of tariffs, you know, monetary policies and going to help you with that, we're paying higher prices because of the immigration policy,

you know, higher insurance, we're going to pay for that, and the other thing is, you know,

“the economy is disgrowing at its potential, 2% that's real GDP growth, that's what we grew”

last year, that's what we grew in the first half of this year, that's what we're going to

grow the second half of the year, and 2% is, you know, if you want, if you want to get inflation down through higher interest rates, that means you got to grow below potential, what does that mean? Well, that means you're going to start losing jobs, layoffs you're going to start kicking again, and then you get into this kind of very self-reinforcing negative cycle, which ultimately

potentially lands on recession, do we really want to go down that path when, you know, raising rates, you know, what's it going to do to combat, you know, the reasons for why inflation is high? Now, again, just to make it clear, if all these things were leading to higher inflation expectations, if it was pushing up wage growth, because, you know, workers thought, you know,

they're going to pay more for energy and business to say, okay, I'm going to give you the higher pay, because I think I can pass those on to consumers and so forth and so on. Then yeah, I think we need to break the back of that, and that would be higher interest rates. But that's not what I'm assuming.

It's not what I'm saying. Are we entering into a world in which monetary policy is sort of a traditional tools

for addressing economic issues or just no longer viable, because, basically, in your description,

that is kind of what it seems like is happening here, where you have an administration that is using its executive powers to such an extent that it is actually making it almost impossible for the Fed to do what it's supposed to do, which is set monetary policy and address that dual mandate, and you're saying, they can't really do that right now. Yeah, you make an excellent point.

It's not that Fed policy monetary policy is losing its efficacy. I mean, you can debate that and argue that, but, you know, on the whole, it's still very effective, but the question is, the Fed is now spending most of its time responding to the fallout from fiscal policies, right?

all those things are contributing. This is not a surprise. We've been having these conversations for a while. This is, like, textbook, I mean, when we talked about tariffs back in the day, when

they first came out, or when we talked about immigration policy, the war, it's a negative

surprise that it means weaker growth, and it means higher inflation, it makes life very difficult for the Fed to reserve, you know, what do they do with that, and that's where we are right now. So this is, you know, it's not like this was unpredictable. This was very predictable, it just, it's macro one and one.

Final question, Kevin Worsh, if he raises rates and it appears he will, based on what traders believe, he will be defying the president and he'll be defying treasury secretary Scott Besson, Trump, of course, was blaming Duran Powell for a lot of our problems, telling

him to bring interest rates down, he didn't do it, that turned into a blow up.

A lot of people thought that Kevin was going to be the guy who would come in and do what what the president wanted, that's apparently not going to happen. Do you think that this could evolve into something similar to what we saw between Trump

“and Duran Powell, well, boy, you know, could you imagine if Kevin Worsh descended tomorrow?”

There's going to be a lot, you know, I've watched a lot of FOMC meetings over about 35 or six years as an economist, professional economist, and there's been drama, but there's a lot of drama, you know, at this particular one, actually all of itself made, you know, kind of drama, it's not that we're suffering a financial crisis or a pandemic, I mean, we got here, you know, on our own, but there is a lot of drama, but I suspect the chair is going to

have to go along with the rest of the committee, it's all about credibility, his own credibility going forward, and he's going to have to vote for a rate increase. You know, I can't imagine that's going to make anyone happy in the executive branch, but, you know, at the end of the day, look, you know, Kevin Worsh was appointed chairman of the Fed, not for a particular rate decision, he was made chair of the Fed because the president trusted his judgment, and, you know, if his judgment

“is the success that we should raise the interest rate at that point, I think, you know,”

that's the appropriate step to take, and the Fed chair is going to have to take whatever, you know, comes down the pike as a result. Mox Andy is chief economist at Moody's analytics, Mark, or is appreciate your time. Thank you. Thanks, Ed. Okay, let's end with a quick check-in on the housing market, as you probably already know, home prices in America are more expensive today than ever before. The average home now costs more than seven times the average household's annual

income that number has never been higher, not even during the housing bubble. That is a function of

the fact that while home prices have kept going up, average wage growth has remained relatively stagnant. In fact, over the past several months, average wages have gone down, and that is a result of the runaway inflation that was of course prompted by our seemingly forever war with Iran. But that is all old news when it comes to housing. Here is the new news. As of last week, the average 30-year mortgage rate rose above 7% for the first time in 15 months. In other words, not only

our home price is rising, but so is the rate in which you would need to borrow in order to buy a home. Why is that rate rising? Again, because of the war. With oil prices soaring, inflation is showing no signs of slowing down, which has resulted in a global bond sell-off, which is causing long-term treasury yields to rise as we covered. And of course, it is those yields that mortgage rates are largely anchored to. So when yields go up, so does your mortgage rate? And that is exactly

what is happening. So what do we have? Historically expensive home prices combined with historically high mortgage rates, resulting in the most unaffordable housing market in the history of America.

“Now, is anyone going to do anything about this? Might our president possibly solve this problem?”

I don't want to drive housing prices down. I want to drive housing prices up. I wouldn't count on it. Okay, that's it for today. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is downchallan, Chris Noodonic, you and Mia Salvario and our social producer is Jake McPherson. Thank you for listening to Proftory Markets from Proftory Media. If you liked what you heard,

give us a follow. I'm Ed Alison. I will see you tomorrow.