Ed Elson

But, you know, when you kind of model this out over the long term and you think about what rising prices actually means for all of the other parts of the economy, we had inflation, which rose to 3.8% last month.

The PPI rose to 6%.

Gas prices are up more than 50% year over year.

Airline fares are up more than 20%.

et cetera, et cetera, et cetera, one of the main implications of these rising prices is that it probably means that we will have a rate hike from the Federal Reserve this year.

And in fact, if we look at the odds on Kalshi, the chances of a rate hike have risen to 40% at the beginning of the year.

Those odds were less than 10%.

You'll remember heading into the year, we thought we were going to have a rate cut.

In fact, the odds of a rate cut on Kalshi again at the beginning of the year were 96%.

We just assumed that this was gonna happen.

And so what happens when you do hike rates, which it increasingly seems that that's potentially gonna happen here, or at least it's a very real possibility getting closer to a probability, it means that you just have higher interest rates across the board.

It means that consumers are spending more on their interest payments, on their mortgage payments, on their auto loan payments.

And then as you've mentioned, the cost of debt rises

for companies too.

Everyone has to pay higher borrowing costs.

What might that do to earnings?

What might that do to earnings expectations?

What might that do to the AI build out?

Which to your point is increasingly dependent on debt.

We look back to October of last year, AI related debt ballooned to more than a trillion dollars.