Core Viewpoint - The discussion centers around the potential actions of the Federal Reserve in 2026, particularly regarding interest rate cuts and the implications of inflation data and economic growth driven by AI investments [1][2][3]. Economic Indicators - Recent inflation numbers are described as "dodgy" and incomplete, suggesting that business leaders may increase prices more aggressively in the coming year [2]. - The impact of AI capital expenditure (capex) investments is noted as a significant contributor to GDP growth [2]. Federal Reserve's Position - There is no urgency for the Fed to commit to rate cuts until more comprehensive data is available, as the current leadership under Chairman Powell is not predisposed to immediate action [3][4]. - The Fed's recent rate cuts are acknowledged as a positive step, and there is a belief that the Fed should not be unfairly blamed for economic challenges [7][8]. Market Dynamics - The yield curve is steepening, and the 10-year Treasury yield remains above 4%, indicating market concerns about government fiscal management [8]. - The idea of allowing the economy to "run hot" is discussed, suggesting that productivity gains from AI could mitigate inflation risks [9]. Employment and Economic Balance - The Fed's dual mandate of managing inflation and unemployment is highlighted as a challenging balancing act, especially with reports of weak hiring numbers [11][12].