ALL INPredictions
Last updated Nov 29, 2025
Prediction
Chamath
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Chamath @ 00:55:35Wrong
economy
In 2023, overall inflation will not decline as rapidly or as sharply as consensus expectations at the start of 2023; instead, it will remain relatively elevated compared with what “people want” or expect.
I will go and pick that inflation, which people expect to fall off a cliff, doesn't fall off a cliff as fast or as meaningfully as people want.View on YouTube
Explanation

Across the main inflation measures and major forecasters, 2023 inflation generally fell as fast or faster than the consensus expected at the start of 2023, not more slowly as Chamath predicted.

Key evidence:

  1. US inflation fell sharply in 2023.

    • Headline CPI went from 6.5% year‑over‑year in December 2022 to 3.4% in December 2023—almost a halving in 12 months.

      • BLS release for Dec 2022: CPI‑U +6.5% y/y.

      • BLS release for Dec 2023: CPI‑U +3.4% y/y.

      (bls.gov)

    • The Fed’s preferred gauge, headline PCE, fell from about 5.0% y/y in February 2023 to 2.6% y/y by December 2023, very close to the 2% target. (bea.gov)

  2. Official forecasts going into 2023 expected more persistent inflation than actually occurred, at least for key advanced‑economy benchmarks.

    • The Federal Reserve’s December 2022 Summary of Economic Projections put median 2023 PCE inflation at 3.1%, with a central tendency of 2.9–3.5%. (federalreserve.gov) Actual year‑end PCE inflation was 2.6% y/y in December 2023—below the Fed’s own 2023 projection and pointing to faster disinflation than that consensus.
    • The IMF’s January 2023 World Economic Outlook Update projected global inflation falling from 8.8% in 2022 to 6.6% in 2023, still well above pre‑pandemic levels, i.e., a gradual, not cliff‑like, decline. (imf.org) By April 2024, IMF Managing Director Kristalina Georgieva stated that headline inflation in advanced economies had fallen to about 2.3% by Q4 2023 from 9.5% 18 months earlier and was easing faster than anticipated—explicitly acknowledging that disinflation beat prior expectations. (reuters.com)

  3. Actual inflation outcomes show a large drop from 2022 to 2023 in advanced economies.

    • Compiled IMF/World Bank data (as summarized on Wikipedia) show average annual consumer inflation in the US falling from 8.0% in 2022 to 4.1% in 2023, the euro area from 8.8% to 5.6%, and the UK from 9.1% to 6.8%. (en.wikipedia.org) These are very large single‑year declines in inflation.
    • In the US specifically, a number of commentators dubbed 2023 the “year of disinflation”, with at least some noting that inflation was slowing even faster than they had expected earlier in the year. (seekingalpha.com)

  4. Some individual forecasts did slightly underestimate full‑year average inflation, but this does not overturn the broad picture.

    • For example, a January 2023 summary of business/economic forecasts cited an expected 3.8% increase in the US CPI for 2023, whereas the BLS later reported an annual‑average CPI increase of 4.1%—a modest overshoot. (nysut.org) That suggests slightly stickier inflation on that particular metric, but against the backdrop of (a) much lower year‑end readings and (b) official forecasts like the Fed’s PCE projection being too high, the overall theme is that disinflation was at least as rapid as mainstream expectations, and often faster.

  5. Did inflation stay above what “people want”?

    • Yes: by the end of 2023, US headline PCE was 2.6% and core PCE 2.9% year‑over‑year—still above the Fed’s 2% target and thus above what central bankers and many consumers would consider “normal.” (bea.gov) But Chamath’s prediction was not just that inflation would remain above 2%; it was specifically that it would not fall as fast or as meaningfully as people/consensus expected. On that relative‑to‑expectations dimension, the evidence above shows inflation generally beat the official consensus in advanced economies.

Putting this together:

  • Inflation in 2023 did remain above 2%, so it was still somewhat elevated vs the ideal target.
  • However, relative to the major starting‑2023 forecasts (Fed, IMF and others), the speed and magnitude of disinflation in advanced economies—especially the US—were broadly stronger than expected, with prominent institutions later describing the decline as faster than anticipated.

Because his normalized prediction hinges on inflation failing to fall as quickly as consensus expected, and the best evidence shows that in many key measures it actually fell at least as quickly, and often faster, than those expectations, this prediction is best classified as wrong overall.