E121: Macro update, Fed hike, CRE debt bubble, Balaji's Bitcoin bet, TikTok's endgame & more

Chamath’s claim was that policy rates would stay “higher for longer” than markets expected or wanted, and would not quickly revert toward near‑zero.

1. What markets expected in March 2023
On March 24, 2023, Fed funds futures were pricing in aggressive easing: CME FedWatch–based estimates showed a roughly 74% chance that the Fed would cut rates by at least 1.25 percentage points by the end of 2023, in response to the banking stress that month.(benzinga.com) At that time, the target range had just been raised to 4.75%–5.00% on March 22, 2023.(en.wikipedia.org) So the market baseline was that rates would soon fall meaningfully from those levels.

2. What actually happened to the Fed funds rate
Instead of cutting in 2023, the Fed hiked further to a target range of 5.00%–5.25% in May 2023 and 5.25%–5.50% in July 2023. It then held at 5.25%–5.50% from July 2023 through mid‑September 2024, the highest level since before the 2008 crisis.(en.wikipedia.org) The first cut did not come until September 18, 2024 (to 4.75%–5.00%), followed by further gradual cuts to 4.25%–4.50% by December 18, 2024 and 3.75%–4.00% by October 29, 2025.(en.wikipedia.org) As of late November 2025, the effective rate is still about 3.9%, well above zero.(tradingeconomics.com)

3. Comparison with recent history (“elevated” level)
From December 2008 to December 2015, and again from March 2020 to March 2022, the Fed kept its target range at 0%–0.25% or similarly ultra‑low levels.(en.wikipedia.org) Relative to that recent history, maintaining rates between roughly 3.75% and 5.5% for over two years (2023–2025) clearly qualifies as “elevated.”

4. Comparison with ongoing market hopes for faster cuts
Even after the peak, markets repeatedly priced in faster and deeper easing than the Fed ultimately delivered. For example, by December 2023, futures markets were betting on at least 100 bps of cuts in 2024, while the Fed’s own projections pointed to a much smaller reduction.(spglobal.com) In reality, the first cut came only in September 2024, and by late 2025 the policy rate is still around 3.75%–4.00%, not anywhere near the pre‑COVID zero bound.(en.wikipedia.org)

Taken together:

• Markets in March 2023 were pricing substantial near‑term cuts from ~5% by end‑2023.
• Instead, the Fed raised rates further, held them at 5.25%–5.50% for about a year, and even after a series of cuts in 2024–25, policy remains around 4%, far from the near‑zero regime of the 2010s.

That aligns closely with Chamath’s statement that rates would stay “long higher than we like and longer than we want”, i.e., higher for longer than most market participants anticipated. On the observable data, this prediction has come true.

Chamath argued in March 2023 that a 5% federal funds rate would be insufficient to tame U.S. inflation and that the Fed would need to raise rates to around 5.5–5.75%, saying “we’re going to need to see a print of five and a half, 5.75%.” At that time, the target range had just been raised to 4.75–5.00% (upper limit 5.0%) on March 22, 2023. (ycharts.com)

What actually happened to rates:

• The Fed continued hiking after this episode, raising the target range to 5.00–5.25% on May 3, 2023 and then to 5.25–5.50% on July 26, 2023. (ycharts.com)
• According to the Fed’s own Monetary Policy Reports, the FOMC then held the federal funds rate at 5.25–5.50% from late July 2023 through mid‑September 2024 before beginning to cut. (federalreserve.gov)
• The rate never went higher than that; the upper limit peaked at 5.50%, not 5.75%. (ycharts.com)

What happened to inflation:

• Core PCE inflation (the Fed’s preferred gauge) was 4.7% in Q1 2023 and had fallen to 2.1% by Q4 2023, then hovered around 2.6–2.9% in 2024–2025, well below its 2022 peak but still somewhat above the 2% target. (ycharts.com)
• Core CPI fell from roughly 5.5–5.6% year‑over‑year in early 2023 to about 3% by late 2024/2025, indicating that the post‑pandemic bout of high inflation had been substantially reduced. (trendonify.com)

Assessment:

• His core quantitative call—that the Fed would need to take rates above 5% into roughly the mid‑5s to get on top of inflation—was borne out: the target range reached 5.25–5.50%, and inflation fell sharply from 2022–23 highs while rates were held at that level. (ycharts.com)
• He did slightly overshoot the precise top (5.75% never materialized), but the realized peak (5.25–5.50) lies within the lower end of the band he gave and matches his statement that a simple 5% rate was insufficient.

Given that the Fed did raise rates above 5% into the mid‑5% area and that this coincided with a decisive moderation of inflation, the prediction is best scored as right (directionally and approximately correct, with minor overestimation of the exact peak).

Sacks suggested the Fed’s March 22, 2023 25‑bp hike might later be seen as the marginal decision that tipped an already‑stressed system into a more serious banking crisis.

What actually happened:

1. The acute banking stress pre‑dated the March hike. Silicon Valley Bank and Signature Bank had already failed on March 10 and March 12, 2023, respectively, marking the core of the 2023 U.S. banking crisis. Their collapses are widely attributed to cumulative rate hikes over 2022–23 combined with concentrated uninsured deposits and poor interest‑rate risk management, not to the incremental March 22 move. (en.wikipedia.org)
2. The main post‑hike failure (First Republic) is not attributed to that specific hike. First Republic was seized on May 1, 2023. FDIC’s own review cites contagion from SVB/Signature, overreliance on uninsured deposits, rapid growth, and failure to mitigate interest‑rate risk as key causes. It characterizes the failure as driven by loss of confidence and structural vulnerabilities, not by a single late‑March rate hike. (fdic.gov)
3. No escalating, systemic banking crisis followed. After a cluster of failures in spring 2023, only a small number of additional U.S. banks failed; by mid‑2024 there had been just one failure that year, and commentators noted that the feared wave of regional bank collapses had "yet to happen." (bisnow.com) Stress in commercial real estate and regional banks has persisted, but regulators and market analysts repeatedly describe the system as broadly resilient and expect, at most, problems at a “moderate number of smaller banks,” not a systemic meltdown. (reuters.com)
4. Macro outcome looks like a soft landing, not a crisis triggered by the March hike. By late 2023–24, mainstream analysis (Goldman Sachs, Congressional Research Service, etc.) characterized the U.S. as being on, or near, a soft‑landing path—inflation falling while GDP growth and employment remained positive—rather than entering a deep crisis caused by over‑tightening. (goldmansachs.com) Major banks continued to pass Fed stress tests comfortably, reinforcing the view that systemic risks were contained. (apnews.com)

In hindsight, the March 2023 25‑bp hike is seen as part of a broader tightening cycle that contributed to stress at poorly managed, rate‑sensitive banks, but it is not generally recognized as the straw that broke the camel’s back or as the clear tipping point into a more serious systemic crisis. The feared escalation did not materialize, and consensus post‑mortems focus on cumulative hikes plus bank‑specific mismanagement rather than that single decision.

Given both the absence of a subsequent, clearly more severe systemic crisis and the lack of historical treatment of that specific hike as the decisive tipping point, the prediction is best classified as wrong.

Sacks argued that after the March 2023 banking turmoil, the next shoe to drop would be a second, more serious phase of banking crisis centered on large unrealized losses and defaults in commercial real estate (CRE) loan portfolios.

What actually happened through late 2025:

• CRE has been a serious, but mostly chronic problem, not a new acute systemic crisis. Office and some retail properties have seen sharp value declines and rising delinquencies, and analysts routinely describe CRE as a “slow‑moving train wreck.” Regional and smaller banks, which hold the bulk of CRE loans, have faced mounting stress and rising non‑performing office loans.(reuters.com)
• Several individual regional banks were hit hard by CRE exposure, most prominently New York Community Bancorp, whose stock fell over 80%, required a $1 billion capital injection, and underwent restructuring after large CRE‑related losses.(apnews.com) A few other small/regional banks have failed or been seized, but these were limited in scale (e.g., Republic First) and not described by regulators as a system‑wide crisis.(wsj.com)
• System‑wide U.S. banking indicators, however, show resilience rather than a second, more severe crisis. The FDIC’s 2024 Risk Review (covering 2023) characterized the industry as having high net income, generally favorable asset quality, and a very low share of “problem banks” (~1.1% of all banks), even while flagging CRE—especially office and malls—as a key risk area.(bankingjournal.aba.com) By Q3 2025, FDIC data show U.S. banks’ net profits rising 13.5% year‑over‑year to about $79.3 billion, with overall past‑due loan rates below pre‑pandemic norms and only 57 problem banks, though CRE past‑dues are elevated.(reuters.com)
• Large banks continue to pass stringent stress tests that explicitly model big CRE shocks. In 2025, all 22 major U.S. banks passed the Federal Reserve stress tests, which included a scenario with a 30% drop in CRE prices, while remaining above regulatory capital minimums—evidence that, at least for large institutions, CRE distress is not pushing the system toward insolvency.(apnews.com)
• Global watchdogs (IMF, FSB) highlight a subset of vulnerable banks combining CRE exposure, unrealized bond losses, and fragile funding, but they describe the post‑2023 global and U.S. banking system as broadly stabilized, with risks needing monitoring rather than an ongoing new crisis.(reuters.com)

In other words, Sacks was directionally right that CRE would become a major pressure point and that stresses there were only beginning to show in early 2023. But his stronger version of the prediction—that this would manifest as a distinct, more serious follow‑on banking crisis for the U.S. financial system, worse than the March 2023 episode—has not materialized by late 2025. The outcome so far is elevated CRE stress, localized bank troubles and some failures, but a still‑profitable, well‑capitalized banking system rather than a second systemic meltdown.

On that basis, the prediction as normalized—a more serious second‑phase crisis centered on CRE loan losses—is best judged wrong given the evidence to date.

Key parts of Sacks’ scenario did not materialize by late 2025, even though downtown San Francisco’s office market has been extremely distressed.

What did happen:

• San Francisco’s downtown office market suffered record vacancies (mid‑30% range) and very steep value declines, with some distressed buildings appraised 20–84% below prior values and vacancy topping 35%(therealdeal.com)(therealdeal.com).
• A number of specific properties defaulted and/or went to foreclosure or auction, including Mid‑Market office towers like 995 Market St. (sold at ~90% discount after a loan default)(sfgate.com), 1019 Market (former Zendesk HQ) heading to foreclosure auction(therealdeal.com), and Union Square offices at 222 Kearny & 180 Sutter scheduled for foreclosure auction after loan negotiations failed(svnordicbeat.com).
• The city’s largest downtown mall, San Francisco Centre, was foreclosed on in 2025; lenders used a credit bid to take control at about $133M, down from a >$1.2B valuation less than a decade prior(sfstandard.com).

Where the prediction breaks down:

1. “All of downtown…owned by a bunch of banks” / “large portion…repossessed by banks”

   • While defaults and special servicing surged, the pattern has largely been distressed sales and loan trades, not a wholesale shift of tower ownership into bank REO. CBRE data show that in 2024, 23 downtown office buildings sold for $916M, more than doubling the transaction count of the prior two years combined(sfchronicle.com)—i.e., properties were changing hands to new private and institutional owners, not simply sitting as bank‑owned stock.
   • CoStar/KBRA analysis highlights that roughly 35% of San Francisco CMBS office loans became distressed(therealdeal.com), but “distressed loans” are typically in workout or sold to investors; they do not imply that a large share of towers have actually been repossessed and held by banks.
   • Many marquee towers remain owned by long‑term institutional owners who refinanced or paid off loans, such as 345 California, where the owner fully paid off a $150M loan and now owns the tower free of that debt(costar.com)—the opposite of lender seizure.

2. “Fire sale…auctions at rock bottom prices” with “no buyers” / very limited demand

   • There have indeed been fire‑sale prices: e.g., 995 Market St. trading for $6.5M vs. ~$62M in 2016(sfgate.com), and multiple downtown towers such as 60 Spear, 350 California, and 550 California changing hands at 60–75% discounts from prior or asking values(sfstandard.com).
   • However, those deals did attract buyers—often well‑capitalized investors explicitly hunting for bargains and willing to take leasing risk. The “boomerang buys” on California Street and Spear Street are framed as investors betting long on the city at deep discounts(sfstandard.com), and follow‑up reporting shows new owners signing multiple new leases at 550 California(sfstandard.com).
   • Market data show that 2024 marked a bottoming and re‑acceleration of buyer activity: CBRE found average sale prices increasing from $253/sf in 2023 to $310/sf in 2024, with transaction volume in 2024 exceeding 2022 and 2023 combined, and much of it involving distressed assets being purchased by wealthy buyers and institutions(sfchronicle.com). MarketWatch similarly describes 2024 as a turning point, with steep discounts but renewed investor and lender interest and more properties trading hands(marketwatch.com). That pattern is inconsistent with “no buyers.”
   • High‑profile examples of distressed‑but‑purchased assets include:
     • Market Center towers: investors Greg Flynn and DRA Advisors took over the distressed $417M mortgage for about $177M, acquiring the two‑tower complex in the largest SF office deal since 2022(bloomberg.com).
     • 353 Sacramento St.: New York Life and Lincoln Property bought a distressed $101.6M loan at a 63% discount to the prior purchase price, effectively stepping into ownership at a low basis(sfstandard.com).
     • 199 Fremont / 300 Howard: DivcoWest and Blackstone acquired the vacant 25‑story tower for about $111M, far below earlier valuations, and are repositioning it for AI‑oriented tenants(en.wikipedia.org)(sfchronicle.com).
   • Even the foreclosed San Francisco Centre mall was taken over via lender credit bid and promptly given to CBRE to market for resale(sfstandard.com)—again indicating an expectation of buyers at the right price, not a market with “no buyers.”

Overall:

• Sacks correctly anticipated severe distress, major value write‑downs, and some foreclosure/auction activity in downtown San Francisco’s commercial real estate. Those elements are clearly visible in the record vacancies, massive appraisal cuts, and a handful of high‑profile foreclosures and auctions(therealdeal.com)(therealdeal.com).
• But the central thesis—that a large portion of downtown office towers would end up owned by banks and dumped in auctions with little or no buyer demand—does not match observed outcomes. Distress has translated primarily into discounted sales and loan trades to opportunistic private and institutional buyers, with transaction volume and investor interest actually rising at the bottom, not evaporating(sfchronicle.com)(marketwatch.com).

Because the core mechanism (widespread bank repossession plus a buyerless auction market) failed to materialize, the prediction is best characterized as wrong, albeit directionally right about stress and price collapses in the downtown San Francisco office sector.

As of November 30, 2025, there is no evidence that the U.S. federal government has launched or actually deployed a new, dedicated $2–3 trillion program specifically to stabilize real‑estate‑ and bank‑related assets (e.g., a TARP‑style bailout or large CRE backstop).

What has happened since the March 2023 regional‑bank turmoil:

• FDIC systemic‑risk actions for SVB and Signature: The FDIC guaranteed uninsured deposits at Silicon Valley Bank and Signature Bank, with estimated losses to the Deposit Insurance Fund of about $18.6 billion, to be recouped via a special assessment on banks—not a multi‑trillion federal outlay. (fdic.gov)
• Bank Term Funding Program (BTFP): The Federal Reserve created the BTFP in March 2023 as an emergency lending facility, collateralized by Treasuries and agency MBS, with Treasury offering up to $25 billion from the Exchange Stabilization Fund as a backstop—far below trillions. (en.wikipedia.org) Usage peaked at roughly $160–165 billion of outstanding loans and the program stopped making new loans on March 11, 2024, then fully wound down. (bpi.com)
• No net multi‑trillion expansion targeted at banks/real estate: Over 2022–2025 the Fed has been reducing its balance sheet (quantitative tightening), from about $9 trillion to roughly $6.6 trillion, not adding 2–3 trillion of new support after the 2023 crisis. (reuters.com) There has been no new CRE‑specific federal rescue facility on the order of trillions; CRE stress is being worked through via private transactions like loan sales and repricing (e.g., banks selling multifamily and other CRE portfolios at discounts to private buyers) rather than a government bailout. (reuters.com)

These measures are two orders of magnitude smaller than the predicted $2–3 trillion and do not match the description of a new, explicit multi‑trillion backstop for real‑estate and bank assets.

However, the prediction used open‑ended language ("inevitable" but no explicit time horizon). The CRE refinancing wave and potential future banking stress will play out over many more years, and it remains possible that at some later date the government could deploy support on the scale Friedberg envisioned.

Because the horizon is not specified and events that might trigger such a program could still occur, the prediction cannot yet be judged definitively right or wrong, so the status is inconclusive (too early).

So far (March 2023 → November 2025), the prediction is neither clearly confirmed nor clearly falsified.

1. Monetary expansion / “money printing”
Friedberg argued that to get out of the debt and fragility hole the U.S. would need substantial further monetary expansion. In fact, since his March 2023 comment the Fed has continued quantitative tightening:

• Fed total assets fell from about $8.7T on March 29, 2023 to $8.0T by September 27, 2023.【1search0】
• They then declined further to $7.5T by March 27, 2024 and $7.1T → $6.7T between September 25, 2024 and March 26, 2025.【1search2【1search1】
• By November 2025, reserve bank credit is around $6.5T, still well below 2023 levels.【1search5】
  This is balance‑sheet shrinkage, not renewed large‑scale “money printing.” That part of the prediction clearly has not happened yet, but he explicitly hedged the timing (“I don't know if it's necessarily in this moment”), so it cannot be called wrong on a multi‑year horizon where the key stress (debt overhang) is long‑run.

2. Inflation behavior
He also implied that this future monetary response would be inflationary, but not in a Weimar‑style hyperinflation sense. Post‑2022, U.S. inflation has actually moderated:

• CPI inflation was 4.1% in 2023, down sharply from 2022’s 8%.【2search1】
• It fell further to about 2.9% in 2024 and is running around 2.9–3.0% in 2025, near but above the Fed’s 2% target.【2search0【1search3【2news15】
  That’s normal advanced‑economy inflation, not the “substantial further inflation” one would associate with a decisive new money‑printing cycle; but again, his statement is about eventual policy needed to resolve long‑term debt/fragility, not strictly about the next two years.

3. No hyperinflation / no collapse to zero
The prediction that the dollar would not suffer Weimar‑style hyperinflation or go to (or near) zero in this period is plainly borne out:

• Hyperinflation is usually defined as >50% per month; U.S. CPI has been ~3% per year, far from that threshold.【2search1【2search0【1search3】
• The U.S. Dollar Index (DXY) is around 99–100 in late November 2025, a level generally considered strong by historical standards, not remotely near currency collapse.【3search3【3search4】
  So the “no Weimar, no zero” sub‑claim has been correct so far, but it was also the least controversial part.

4. Long‑term devaluation “like the pound at the end of the British Empire”
This is inherently a multi‑decade structural claim about the dollar’s global role and gradual loss of real value, analogous to sterling’s slow post‑imperial decline. With only ~2.5 years elapsed since the prediction, and the dollar still the dominant reserve currency trading near historical averages in DXY terms, there is not yet enough evidence to say whether this analogy will prove right or wrong.

Bottom line

• The dramatic parts that would be clearly falsifiable in the short run (hyperinflation, dollar near zero) have not happened, in line with his view.
• The core mechanism he described (eventual renewed money‑printing to resolve debt, leading to a slow, structural dollar decline) is about the long‑run path of U.S. fiscal/monetary policy and the dollar’s reserve‑currency status. Given ongoing QT and only moderate inflation so far, this has not been validated, but the relevant time horizon is much longer than 2023–2025.

Because the main claim is explicitly long‑term and the key monetary‑expansion piece could still occur in future cycles, the correct classification as of November 30, 2025 is **“inconclusive (too early)” rather than clearly right or wrong.

Historical Bitcoin price data show that on 17 June 2023, Bitcoin was trading around the $26,000–$27,000 range, nowhere close to $1,000,000 per coin, and it has never reached $1,000,000 at any point up through 30 November 2025.

Jason’s prediction, paraphrased as: “there's probably no chance of [Bitcoin hitting $1M by June 17] or a very tiny chance” is therefore correct in its factual implication about the outcome (Bitcoin did not reach $1,000,000 by June 17, 2023), and the real-world result is fully consistent with his characterization of that probability as extremely low.

Multiple sources on Balaji Srinivasan’s public bet state that he wagered Bitcoin would reach $1,000,000 within 90 days of March 17, 2023, with a target around June 17, 2023.

• CoinDesk reports that he predicted Bitcoin could reach $1 million in 90 days after March 17, i.e., by about June 17, 2023, and that this was the core of his widely discussed bet. (coindesk.com)
• Historical price data show that on June 15, 2023, Bitcoin’s closing price was about $25,576, vastly below $1,000,000, and June 2023 prices ranged roughly from the mid‑$24k to around $31k, never approaching $1M. (statmuse.com)
• Coverage of the bet’s outcome notes that Balaji closed the bet early as a losing bet, confirming that Bitcoin did not reach $1M within the 90‑day window. (coindesk.com)

Since Bitcoin remained tens of thousands of dollars, not $1,000,000, by mid‑June 2023, Sacks’s prediction that it would not hit $1M within 90 days of March 17, 2023 was correct.

Phase 1 of Sacks’s scenario (the 2023 banking turmoil driven by bond losses) clearly happened and was already underway when he spoke: several U.S. regional banks including Silicon Valley Bank, Signature, and First Republic failed in March–May 2023, prompting a brief banking crisis that regulators largely contained rather than it evolving into a continuing systemic meltdown.【⁠cite⁠⁢turn0search13⁠⁠】

However, the subsequent phases he described have not unfolded as predicted within the “next couple of years” (roughly 2023–2025):

1. Commercial real estate (CRE) “major, deflationary crisis”

   • The office/CRE market has suffered a serious downturn: office values are estimated to have lost hundreds of billions of dollars since 2019, with national office vacancy rates around 20%, and office CMBS delinquencies near prior crisis peaks.【⁠cite⁠⁢turn0news18⁢turn1news13⁢turn1search5⁠⁠】
   • But major banks and regulators generally frame this as a contained but serious headwind, not a systemic financial crisis. Analyses from large banks and policy research argue that while CRE losses will pressure earnings—especially at regional banks—they are unlikely by themselves to trigger a broad banking collapse; Fed stress tests and regulatory guidance similarly see CRE as a key risk but not a system‑wide breaking point.【⁠cite⁠⁢turn1search3⁢turn1search8⁠⁠】
   • So far, we see a slow‑moving, sector‑specific downturn rather than the clearly identifiable second “phase” of a multi‑stage financial crisis that Sacks forecast.

2. Government/sovereign debt crisis causing renewed, high inflation via debt monetization

   • While public debt levels and interest costs in advanced economies (including the U.S.) have become a growing concern, mainstream assessments emphasize rising fiscal pressure and political risk—not an actual sovereign debt crisis or loss of market access in the U.S., euro area, or other major developed economies. Credit ratings for these countries remain investment‑grade, and commentary talks about the risk of a future spiral rather than a crisis that has already arrived.【⁠cite⁠⁢turn1news14⁢turn2search22⁠⁠】
   • At the same time, inflation has mostly fallen from its 2022 peak. U.S. inflation dropped from around 9% in mid‑2022 to roughly 2–3.5% in 2023–2025, as the Fed’s preferred PCE index and CPI both moved much closer to the 2% target before edging slightly higher again; this pattern reflects disinflation and modest above‑target inflation, not a new “highly inflationary” episode driven by explicit monetization of a sovereign debt crisis.【⁠cite⁠⁢turn2search21⁢turn2news14⁠⁠】

Because by late 2025 we have: (a) a contained post‑2023 banking episode rather than a rolling multi‑year crisis, (b) a severe but so far non‑systemic CRE slump, and (c) no realized government/sovereign debt crisis or inflationary debt monetization in major economies, Sacks’s specific three‑phase, “next couple of years” crisis roadmap has not materialized. The core multi‑phase prediction, including its implied timeline and inflationary endgame, is therefore best judged as wrong on the evidence available so far.

The prediction described a June 2023 scenario in which (a) Congress would fail to agree on a timely debt‑ceiling increase due to a hardline Republican stance, and (b) the U.S. would therefore technically default on some federal obligations, causing severe market turmoil.

What actually happened:

• Facing an early‑June “X‑date,” President Biden and Speaker McCarthy negotiated the Fiscal Responsibility Act of 2023, which suspended the debt ceiling until January 1, 2025. The House passed it on May 31, 2023, the Senate on June 1, and Biden signed it on June 3, 2023.(en.wikipedia.org)
• This deal explicitly aimed to avert default, and contemporaneous reporting characterized the outcome as a crisis averted and stated that the United States would not be defaulting on its debt.(thefiscaltimes.com)
• Analyses of the episode and subsequent commentary continue to treat 2023 as another near‑miss debt‑ceiling crisis: the ceiling was reached, extraordinary measures were used, but no default actually occurred; instead, the episode contributed to a later Fitch downgrade of U.S. credit quality, not to a June 2023 default.(washingtonpost.com)

Because Congress ultimately did reach an agreement in time and the U.S. did not technically default on its obligations in June 2023, the concrete scenario described in the prediction did not materialize. The conditional causal claim (“if no deal, then default and turmoil”) is broadly consistent with mainstream analysis, but the real‑world event it was tied to—actual default and meltdown in mid‑2023—did not happen. Therefore, evaluated as a prediction about what would occur in that period, it is wrong.

Available data through late 2025 show no sign of Weimar‑style hyperinflation in the U.S. dollar.

• U.S. CPI inflation was about 4.1% in 2023, then fell to about 2.9% in 2024, and is running around 3% in 2025, far from hyperinflation (which is usually defined as 50% per month or more).(in2013dollars.com)
• Recent estimates put annual U.S. inflation in the 2.9–3.1% range in mid‑to‑late 2025—again, normal/moderate inflation, not a runaway collapse of currency value.(tradingeconomics.com)
• Articles discussing hyperinflation risk in the U.S. continue to frame it as a theoretical or future possibility tied to debt and monetary expansion, not as something that is currently happening.(forbes.com)

Since more than two years have passed since the March 2023 prediction and the dollar has experienced ordinary single‑digit annual inflation (with no sudden, total loss of confidence or reserve‑currency status), the prediction that the U.S. would not undergo Weimar‑style hyperinflation in the foreseeable future has been borne out so far.

The prediction specified that the U.S. Federal Reserve would release its investigation into both Signature Bank and Silicon Valley Bank (SVB) in early May 2023.

What actually happened:

• Silicon Valley Bank (SVB): The Federal Reserve did conduct and publish a review of its own supervision and regulation of SVB. This report was released on April 28, 2023, via a Fed Board press release and accompanying report, i.e., slightly before early May but clearly within the predicted timeframe. (federalreserve.gov)

• Signature Bank: The main post‑mortem on Signature’s failure and supervision was not published by the Federal Reserve. Instead, it was released by the FDIC ("FDIC’s Supervision of Signature Bank") on April 28, 2023, and by the New York Department of Financial Services. (fdic.gov) The Fed’s own June 2023 Monetary Policy Report explicitly distinguishes these: it notes that on April 28, 2023 the Federal Reserve published the SVB review, while the FDIC published the report examining the failure of Signature Bank. (federalreserve.gov)

So, while investigation reports into both banks were indeed public by late April 2023, only SVB’s report came from the Federal Reserve. Signature’s investigation was led and released by different regulators (FDIC and NYDFS), contradicting the prediction’s specific claim that “the Fed will release their investigation into Signature Bank and SVB.”

Because a core element of the prediction (the Federal Reserve itself investigating and releasing a report on Signature Bank) did not occur, the prediction is best assessed as wrong, even though the timing for the SVB portion was roughly correct.

Public policy has in fact moved toward the outcome Friedberg described: a forced spin‑out of TikTok’s U.S. operations into a U.S.-controlled entity with ByteDance reduced to a small, largely passive stake.

Key facts:

• In April 2024, Congress passed the Protecting Americans from Foreign Adversary Controlled Applications Act, which requires ByteDance to divest TikTok’s U.S. operations or face a nationwide ban. The Supreme Court upheld this sale‑or‑ban law in January 2025, cementing divestiture as the required policy path unless TikTok exits the U.S. entirely. (macrumors.com)
• On September 25, 2025, the White House issued an executive order (“Saving TikTok While Protecting National Security”) blessing a qualified divestiture: TikTok’s U.S. app will be operated by a new U.S.-based joint venture that is majority‑owned and controlled by U.S. persons, with ByteDance and other “foreign adversary” entities holding under 20% combined. The order specifies that algorithms, code operations, and U.S. user data will be under the control of the U.S. venture and monitored by U.S. “trusted security partners.” (whitehouse.gov)
• Reporting on the deal structure (Reuters, Guardian, Washington Post and others) is consistent: an Oracle/Silver Lake/a16z‑led U.S. consortium will control roughly 65–80% of TikTok U.S., while ByteDance’s equity stake is capped below 20%. The new company is U.S.-incorporated, with a seven‑member board where six seats go to Americans and one to ByteDance, giving governance and control clearly to U.S. interests. (reuters.com)
• U.S. officials and deal summaries emphasize that ByteDance will be a passive minority investor with no operational control. Algorithms are licensed as IP but are to be run, retrained, and monitored on U.S. soil under U.S. security oversight, and all U.S. data must reside on Oracle‑run U.S. infrastructure. (reuters.com)
• Financial reporting indicates ByteDance is expected to receive around 50% of TikTok U.S. profits via a mix of its sub‑20% equity stake and licensing/profit‑sharing arrangements, which critics say makes the break less than “clean” even though voting control and governance lie with U.S. shareholders and directors. (chinastrategy.org)

How this maps to the prediction:

• Correct: The U.S. policy outcome is to force a spin‑out/divestiture of TikTok’s U.S. operations rather than a straight ban, and to place majority equity ownership and governance control in U.S. hands. That is exactly what the 2024 law and the 2025 executive order implement.
• Correct in spirit but not literal: ByteDance is reduced to a sub‑20% minority stake with one of seven board seats and no operational control, which makes it effectively a constrained, passive investor. However, its shares are not formally non‑voting; it retains limited voting rights and a board seat, plus significant profit participation via licensing.

Overall, the central thesis of Friedberg’s call—that U.S. policy would most likely force TikTok into a U.S.-controlled spin‑out with ByteDance left holding only a small, constrained stake while Americans hold majority ownership and governance—has played out. The main inaccuracy is the specific detail that ByteDance’s remaining equity would be wholly non‑voting, which turned out to be only partly true (practically passive, but not legally non‑voting). Hence the prediction is best characterized as right on the core outcome, with minor structural details off.

Available evidence shows the U.S. government has moved toward allowing and structuring a divestiture of TikTok’s U.S. operations, not toward a deliberate permanent shutdown chosen instead of divestiture.

1. Congress explicitly created a divest-or-ban framework. The Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), signed April 24, 2024, mandates that apps like TikTok must be divested from foreign-adversary control within a set period or face a ban, and it explicitly states that the law ceases to apply if a “qualified divestiture” occurs. This shows lawmakers saw divestiture as a real, acceptable option, not something they would reject out of hand as technically unverifiable. Sources: legislative text and summaries of PAFACA (en.wikipedia.org)

2. The January 2025 "ban" was brief and not accepted as the final outcome. When the compliance deadline passed in January 2025, TikTok briefly went offline and was removed from U.S. app stores as the law took effect. Within roughly a day, President Trump issued an executive order delaying enforcement of the law, and TikTok service was restored. This reflects a desire to avoid a permanent shutdown and seek another solution, not a settled choice to end operations in the U.S. (en.wikipedia.org)

3. The Trump administration has formally endorsed a divestiture plan and found it sufficient on code/infrastructure grounds. On September 25, 2025, the executive order titled “Saving TikTok While Protecting National Security” states that an interagency process reviewed a detailed divestiture plan for TikTok’s U.S. operations and concluded it is a “qualified divestiture” under the Act. The order explicitly says:

   • the new U.S. joint venture will be majority-owned/controlled by U.S. persons;
   • TikTok’s algorithms and code for U.S. operations will be under the control of the new U.S. entity;
   • U.S. user data will be stored in an American-run cloud environment;
   • there will be intensive monitoring of software updates, algorithms, and data flows by trusted U.S. security partners.

   The order then determines that this divestiture resolves national security concerns and directs the Attorney General not to enforce the Act for 120 days so the deal can be completed. This is the opposite of lawmakers refusing to be satisfied that the codebase and infrastructure can be separated and verified; they explicitly say the proposed technical and governance measures are adequate. (whitehouse.gov)

4. Current policy aims to keep TikTok operating under new ownership, not to shut it down. As of late November 2025, enforcement of the statutory ban continues to be delayed to facilitate the divestiture, and the administration’s stated goal is to “save” TikTok while addressing security risks. TikTok remains operational in the U.S., and the company is still investing in U.S. public policy efforts amid this ongoing process. (whitehouse.gov)

Because U.S. policymakers have (a) legislated a divest-or-ban structure that explicitly accepts divestiture, (b) reversed from an initial brief shutdown to repeated enforcement delays, and (c) formally found a specific divestiture plan—including code and infrastructure controls—sufficient to mitigate national security concerns, Chamath’s prediction that the government would ultimately choose to shut TikTok down instead of allowing divestiture due to unverifiable code separation does not match the actual trajectory or reasoning of U.S. policy.

On both the mechanism (they are facilitating divestiture rather than choosing shutdown) and the justification (they have said technical separation and monitoring can be adequate), the prediction is wrong as of November 30, 2025.

Evidence since the March 23, 2023 hearing shows that the U.S. government ultimately chose a ban/sale path rather than letting TikTok continue under ByteDance ownership with conditions like “Project Texas.” At the hearing itself, lawmakers in both parties signaled they did not trust TikTok’s mitigation plan and were openly discussing a full ban or forced divestiture, rejecting Chew’s proposal to keep TikTok under ByteDance with data-firewall conditions. (cnbc.com)

In April 2024, Congress passed and President Biden signed the Protecting Americans from Foreign Adversary Controlled Applications Act, requiring ByteDance to divest TikTok’s U.S. operations by January 19, 2025 or face a nationwide ban. ByteDance and TikTok sued to block the law, explicitly warning that if they lost, the act would “force a shutdown of TikTok by January 19, 2025.” (macrumors.com)

Courts ultimately upheld the law, and on January 18–19, 2025, the ban did go into effect: TikTok sent in‑app notices to U.S. users that a U.S. law banning TikTok was taking effect and that services would be “temporarily unavailable,” and the app was removed from the Apple App Store and Google Play in the U.S. Multiple outlets reported TikTok had “officially shut down” or “shut down in the United States” as the law’s ban provisions kicked in, with hosting providers required to stop supporting the app. (9to5mac.com)

Within days, President‑elect (then President) Trump pledged to delay enforcement and extend the divestiture deadline, allowing TikTok to restore service via its infrastructure partners, though it remained in legal limbo and off major app stores for some time. The Supreme Court’s and administration’s actions still left TikTok subject to the sell‑or‑ban framework rather than any long‑term regime where ByteDance could simply keep operating it with conditions. (theverge.com)

By late 2025, TikTok is operating again in the U.S. but only in the context of a forced divestiture: Reuters reports that under a 2024 national‑security law, ByteDance is in the process of divesting roughly 80% of TikTok’s U.S. assets to a consortium led by Oracle and Silver Lake, with ByteDance retaining less than a 20% stake and the algorithm being retrained under U.S. supervision. Another Reuters piece notes Trump approved a divestiture plan and extended the enforcement deadline to January 20, 2026, but still under the requirement that TikTok’s U.S. operations come under majority American control. (reuters.com)

Putting this together:

• The U.S. did not settle on the scenario Chamath was implicitly rejecting (TikTok remaining under ByteDance ownership with a "Project Texas"‑style fix). Instead, Congress and the courts backed a law that either forces sale or shuts TikTok down.
• That law actually produced a real nationwide shutdown of TikTok in January 2025 before political intervention temporarily relaxed enforcement.
• The medium‑term end state, as of November 2025, is a forced divestiture away from ByteDance, not continued ByteDance ownership with conditions.

Because TikTok was forced to shut down in the U.S. under federal law, and the U.S. ultimately rejected the “ByteDance keeps it with conditions” path in favor of ban/sale pressure culminating in divestiture, Chamath’s core prediction—that the post‑hearing political trajectory would lead to TikTok getting shut down rather than being allowed to keep operating under ByteDance with some compliance wrapper—is best assessed as right, albeit with the nuance that the shutdown, while real and nationwide, was later partially reversed and followed by a sale process rather than a permanent ban.