Interview
Fed Hesitates on Tariffs, The New Mag 7, Death of VC, Google's Value in a Post-Search World
- The Federal Reserve is expected to delay rate decisions until the impact of tariffs is observed, potentially acting on political motivations regarding midterms rather than purely financial metrics, though rate cuts may occur if equity liquidity fails.
- Tariffs are projected to potentially become a standard 10% across-the-board rate generating significant federal revenue, allowing for future tax cuts, with only 50% of costs passed to pricing and a potential resolution with China within two years.
- While the economy is currently viewed as robust based on hard data despite weak consumer sentiment, rates sustained at 4% to 5% could have major economic implications, and the market may face a "tariff tantrum" rather than a crisis.
- The Trump administration anticipates a "$10 billion Boeing order" following a tech surtax elimination, with trade deals expected to drive GDP and employment.
- Philippe Lafont forecasts tariffs may disappear within two years as deregulation takes hold, shifting market focus to AI as the dominant trend for the next decade.
- Google is projected to spend $75 billion annually on AI capex, potentially reducing employee headcount to boost earnings, though search ad revenue share could drop from 99% to 75% within two years as Gemini integration intensifies and clicks below AI boxes decline by 15% to 35%.
- Investment expectations in mature markets require mid-to-high 20% net returns to justify illiquidity, while reduced risk capital in countries like China or Canada could lead to stagnation over 10 to 20 years.
- A new hybrid public-private fund aims to build a "new mag seven" of 25 companies, including SpaceX and Stripe, by investing in private entities like humanoid and robot taxi firms once a 75% likelihood of leadership is established.
- The fund structure seeks to democratize tech investing with a $50,000 minimum, uncapped investor access up to 10 million participants, and a 1099 reporting structure, potentially surpassing the $1.3 billion Blackstone launch.
- Fee structures for the new fund are set at 1.25% management and 12% performance fees, with near-permanent capital designed to compound over five to seven years, aiming to address the overheated private market and stalled IPO/M&A flywheel.