Sharpe's think that inflation will come back at some point in the next six months. That will keep the Fed's foot on the gas. Maybe it's 2 or 3 more 50 basis point hikes. The point is Jason, you could be at five and a half. Again we said this last week we're going to get to a point that's probably higher than what people expect. That's probably around five and a half. And we'll stay there longer than people want. That's probably through the middle part of 24.View on YouTube
Chamath’s forecast had multiple components:
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Inflation “comes back” within ~six months of Nov 2022
Headline CPI year‑over‑year kept trending down from 7.1% in Dec 2022 to about 3.0% by June 2023, so there was no sustained re‑acceleration in that six‑month window.(officialdata.org)(moneylion.com) However, on a month‑over‑month basis, January 2023 CPI rose 0.5% after a soft December number, and contemporaneous coverage described this as inflation “turning higher to start 2023,” reflecting stickier inflation than markets had hoped.(cnbc.com) Later in 2023, year‑over‑year CPI did edge back up from ~3.0% in June to ~3.7% by September, i.e., some renewed inflation pressure, but that re‑uptick clearly arrived after the strict six‑month window.(moneylion.com) So this part of the prediction was directionally plausible but poorly timed and weaker than implied. -
Fed hikes the policy rate to roughly 5.5%
After the podcast (with the target at 3.75–4.00% in early Nov 2022), the FOMC raised the federal funds target range across several meetings: 4.25–4.50% in Dec 2022, 4.50–4.75% in Feb 2023, 4.75–5.00% in Mar 2023, 5.00–5.25% in May 2023, and finally 5.25–5.50% on July 26, 2023.(en.wikipedia.org) That terminal range is effectively the “about 5.5%” he called. -
Fed holds around that level until about mid‑2024
Once the Fed reached 5.25–5.50% in July 2023, it kept that range unchanged at every meeting through at least July 31, 2024 (Jan, Mar, May, June, and July 2024 meetings all held at 5.25–5.50%).(en.wikipedia.org) The first cut came later, on September 18, 2024, when the range was lowered to 4.75–5.00%.(en.wikipedia.org) That means the funds rate stayed at ~5.5% past the “middle part of ’24” that he suggested.
Overall assessment
The core, quantitative part of the forecast—that the Fed would take rates to roughly 5.5% and then keep them there until around mid‑2024—was very accurate in both level and duration. His mechanistic story and timing about inflation “coming back” within six months was weaker: inflation mostly decelerated over that horizon, though there was a brief early‑2023 monthly pickup and a modest re‑acceleration later in 2023. Given the evaluation standard and the fact that the most specific and risky elements (terminal rate and “higher for longer”) played out almost exactly as described, the prediction is best classified as right, with the caveat that the inflation‑timing rationale was off.