ALL INPredictions
Last updated Nov 29, 2025
Prediction
Chamath
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Chamath @ 00:23:34Wrong
economymarkets
If the inflation data released on the Friday following this recording shows moderating inflation and moderate growth, the Federal Reserve will signal a less aggressive tightening path and equity markets will experience a significant short‑term rally immediately afterward.
So right now we're in a moment of pause. And there is the potential If this data comes back as reasonably good, which means prices are not escalating as much as we thought, inflation is not going to be as bad. Growth is going to be moderate. That that gives a lot of ammo for the fed to kind of take their foot off the off the gas here. In that case the markets will go boom.View on YouTube
Explanation

The condition in Chamath’s scenario essentially did occur, and the equity‑market part of his prediction played out, but the Federal Reserve part did not.

  1. Did the Friday inflation data look “reasonably good”?
    • On Friday, May 27, 2022, the BEA released the Personal Income and Outlays, April 2022 report. Headline PCE inflation (the Fed’s preferred gauge) rose 0.2% month‑over‑month and 6.3% year‑over‑year, down from 6.6% in March; core PCE slowed to 4.9% from 5.2%.(bea.gov)
    • Multiple summaries framed this as a moderation in inflation and evidence it may have peaked: e.g., coverage noted that the PCE index was “the first slowdown since November 2020” and that price pressures were “finally…moderating, at least for now.”(americanchemistry.com)
    • The same data showed consumer spending up 0.9% and personal income up 0.4% in April, described as a “healthy” pace that supported ongoing growth.(bea.gov)
    → That matches his condition of moderating inflation with still‑positive (“moderate”) growth.

  2. Did the Fed signal a less aggressive tightening path as a result?
    • Around that time, Chair Jerome Powell had already signaled plans for back‑to‑back 0.5‑percentage‑point hikes in June and July and pledged to keep “ratcheting up” rates until inflation was coming down in a “clear and convincing” way.(ottawa.citynews.ca)
    • Reporting on the May 27 PCE data explicitly noted that, despite the slight cooling, inflation was still very high and most economists expected the Fed to continue raising rates, not ease off.(bangordailynews.com)
    • In fact, at its very next meeting on June 15, 2022, the FOMC increased the pace of tightening, delivering a 0.75‑point hike—the largest since 1994—underscoring a more aggressive, not less aggressive, path.(en.wikipedia.org)
    → The data may have given “ammo” in an abstract sense, but the Fed did not actually signal or adopt a less aggressive tightening path.

  3. Did equity markets “go boom” immediately afterward?
    • U.S. equities rallied strongly into and on that Friday. On May 27, 2022, the Dow rose about 1.8%, the S&P 500 2.5%, and the Nasdaq 3.3%; it was the first positive week for the major indices after a long losing streak.(businesstimes.com.sg)
    • Coverage tied the move directly to the PCE release, describing the rally as driven by “signs of moderating inflation” and evidence that inflation might be at or near a peak.(thenationalnews.com)
    → This is consistent with his claim that, under those conditions, “the markets will go boom,” at least in the short term.

Net assessment
Chamath was directionally right that moderating inflation data would spark a short‑term equity rally, and that’s exactly what happened after the May 27, 2022 PCE release. However, the normalized prediction also requires that the Fed signal a less aggressive tightening path, and subsequent communications and actions show the opposite: the Fed stayed hawkish and then tightened even more aggressively in June. Because that key component failed, the overall prediction—taken as stated in the normalized form—is best classified as wrong, albeit with a partially correct market call.