The prediction was made in October 2023 and is explicitly long‑horizon (“over the coming years”) and partly about a hard‑to‑measure outcome (long‑term innovation), so by late 2025 it is too early to score definitively.

1. Conditional setup (deficits, inflation, Fed cuts)
• The U.S. has not adopted major deficit‑reduction measures. CBO’s 2024–25 budget outlooks still project very large, persistent deficits (around 6% of GDP) and rising debt‑to‑GDP over the next decade, even after the 2023 Fiscal Responsibility Act.(crfb.org) A large GOP “megabill” enacted in July 2025 is estimated by CBO to increase deficits by about $4.1 trillion over 10 years.(politico.com)
• Inflation has come down substantially: average CPI inflation over 2025 is just under 3%, vs. much higher rates in 2022.(officialdata.org) Core PCE inflation is running in the high‑2% range as of late 2025.(wsj.com)
• The Fed has cut policy rates from a 5.50% peak in 2023 to a 3.75–4.00% target range by October 2025.(ycharts.com)
So the antecedent of his conditional prediction (no serious deficit action and later lower inflation and Fed cuts) is largely satisfied.

2. Long‑term interest rates and cost of capital
• The 10‑year Treasury yield is about 4.0% in late November 2025—down from ~5% highs in 2023, but still well above pre‑2020 norms and described in CBO‑based analysis as “elevated,” with an expected ~3.9–4.1% average 10‑year yield over 2025–34.(ycharts.com)
• Long‑term borrowing costs like the 30‑year mortgage rate remain around 6.2%, higher than typical 2010s levels, indicating a still‑high overall cost of capital compared with the prior decade.(apnews.com)
This is broadly consistent with his claim that long‑term rates would “remain high” even after inflation fell and the Fed began cutting, although rates have eased somewhat from their 2023 peaks.

3. Innovation and investment effects
The crucial final part of the prediction is that persistently high long‑term rates “are going to reduce long term innovation in the economy.” That is very difficult to verify by 2025:

• "Innovation" has no single, decisive metric; proxies (R&D, patents, startup formation, productivity) evolve slowly and are influenced by many non‑rate factors.
• Long‑term budget analyses (e.g., CBO and related commentary) emphasize that high debt and interest costs will tend to slow growth and investment over decades, but they do not claim an observable, realized collapse in innovation in the first couple of years.(crfb.org)

Given the multi‑year horizon implied by the quote and the inherently slow, noisy nature of innovation data, it is premature in 2025 to say whether U.S. long‑run innovation has actually been reduced in the way he predicted, even though the fiscal and interest‑rate backdrop is moving in the direction he described.

Bottom line: The fiscal and rate environment so far is broadly consistent with his mechanism (large deficits, lower inflation and Fed cuts, yet still‑elevated long‑term yields and cost of capital). But the core outcome—depressed long‑term innovation and investment “over the coming years”—cannot yet be clearly observed or falsified. Therefore the prediction is inconclusive at this point in time.