ALL INPredictions
Last updated Nov 29, 2025
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Chamath @ 00:35:04Right
economy
Over the coming years, as deglobalization and national-security–driven supply-chain reshoring proceed, the U.S. (and broadly the developed world) will experience a persistent regime of higher interest rates, higher inflation, and higher input costs compared to the pre‑2020 "cheaper, faster, better" globalization era, even as overall economic growth can remain positive.
That era of cheaper, faster, better is over. And what comes with that is better national security. But the cost of that better national security is higher prices, higher prices, less growth. And there's nothing that we can do to avoid that... I actually think that there's enough excess slack to be absorbed by all of this free money, that I think you can still have sustained growth, but it will come with higher interest rates and higher inflation and higher input costs.View on YouTube
Explanation

Evidence since the August 2022 episode lines up well with Chamath’s outlined regime: higher rates, higher inflation and costs than the pre‑2020 globalization era, alongside continued (but slower) growth.

  1. Higher and sustained interest rates vs. the 2010s:
    From 2010–2019 the effective federal funds rate was typically near 0–2.5%, averaging around the low‑1% range. Since the 2022 hiking cycle, the annual effective rate has been 1.69% (2022), 5.03% (2023), and 5.14% (2024), with the target range still 3.75–4.00% as of late 2025—well above the 2010s norm. This is a multi‑year shift to structurally higher policy rates compared with the pre‑COVID decade. (ycharts.com)

  2. Inflation and input costs above the pre‑COVID norm:
    Core PCE inflation in the U.S. averaged roughly 1.5–1.7% in the 2010s; since 2021 it has been materially higher: 3.6% (2021), 5.3% (2022), 4.2% (2023), and 2.9% (2024). Headline PCE shows a similar pattern, with 2021–24 all above the 2010s average even after the initial spike faded. (ycharts.com)
    Price levels for many inputs (energy, key commodities, labor, and capital) remain structurally higher than in the 2010s; even as inflation has cooled toward 2–3%, it has settled at levels modestly above the old regime rather than snapping back to sub‑2% dynamics.

  3. Deglobalization / national‑security supply‑chain shift is real:
    IMF and BIS work document “geoeconomic fragmentation”: a sharp rise in trade‑restricting measures since late 2010s, trade and FDI flows re‑routing along geopolitical lines, and friend‑shoring/near‑shoring away from China toward countries like Mexico, Vietnam and India. (imf.org)
    Federal Reserve research on U.S. FDI finds outward investment and advanced‑manufacturing activity shifting from China/Hong Kong to allies and some evidence of reshoring into high‑tech U.S. manufacturing. (federalreserve.gov)
    Domestically, U.S. manufacturing construction has surged to record levels—over 10% of total construction spending—driven explicitly by supply‑chain security, CHIPS/IRA incentives, and corporate “de‑risking,” consistent with a costlier, security‑focused production structure. (seekingalpha.com)

  4. Growth: positive but weaker relative to the hyper‑globalization era:
    U.S. real GDP growth since 2022 has remained positive—about 2.5% (2022), 2.9% (2023), 2.8% (2024), with projections around ~2% for 2025—so the economy has avoided recession and continued expanding. (en.wikipedia.org)
    However, the World Bank and others judge the 2020s on track to be the weakest decade for global growth since the 1960s, largely due to elevated trade tensions and fragmentation, implying “less growth” globally compared with the 1990s–2000s hyper‑globalization era. (theguardian.com)

  5. Assessment against the exact claim:

  • “Higher interest rates” than the pre‑2020 era: clearly true for 2022–25, with a multi‑year step‑up in policy rates and bond yields.
  • “Higher inflation and input costs” relative to the 2010s: also borne out—post‑COVID inflation has declined from its peaks but has remained above the old ~1.5% core PCE norm, with higher labor, energy, and capital costs embedded in the system.
  • “Less growth, but still sustained growth”: global forecasts and realized data show slower (though still positive) growth relative to earlier globalization decades; the U.S. itself has had solid growth so far but is projected to slow into the low‑2% range as higher rates and tariffs bite. (en.wikipedia.org)
  • Deglobalization / security‑driven reshoring as a driver: empirical work and policy moves (tariffs, CHIPS Act, FDI re‑routing) confirm that national‑security and resilience concerns are materially reshaping supply chains in the direction he described.

It’s still early to declare a permanent new macro regime, but over the 2022–2025 window—the “coming years” he referenced—the combination of deglobalization pressures with persistently higher rates, higher inflation than the 2010s, elevated input costs, and continued (but less buoyant) growth matches his forecast closely. Hence the prediction is best judged as right given the evidence to date.