Chamath framed post‑COVID inflation as a “head fake” that would prove transitory, implying only a brief spike before settling back near the pre‑pandemic norm and not becoming a serious, multi‑year problem. In reality, U.S. CPI inflation ran well above the Fed’s 2% target for four straight years: about 4.7% in 2021, 8.0% in 2022, 4.1% in 2023, and 2.9% in 2024, with 2025 still around the mid‑2% range—meaning elevated inflation persisted for several years after COVID rather than being a short blip. (usinflationcalculator.com)

The severity and duration of the surge forced the Fed into its most aggressive hiking cycle since the early 1980s, after which Chair Jerome Powell explicitly retired the word “transitory” for inflation and described the earlier framing as inappropriate. (cnbc.com) Financial and economic commentary now generally describes this as a multi‑year high‑inflation episode and even a shift toward an above‑2% inflation regime, not a mere head fake, with articles in late 2024–25 referring to “high inflation entering its fifth year” and the Fed projecting inflation above target for years to come. (investopedia.com) That contradicts the prediction that long‑term inflation would turn out not to be a serious issue.

On the narrower point about market expectations: 10‑year breakeven inflation did spike toward ~3% in 2021–22 but subsequently fell back to roughly 2.2–2.3% by late 2025, close to its historical median of about 2.2%. (fred.stlouisfed.org) So it is fair to say long‑run market expectations remained anchored. But that outcome coexisted with several years of realized inflation far above target and continued policy concern, so it does not validate the broader “head fake / no real inflation problem” thesis.

The second leg of the prediction—that once inflation fears faded, U.S. homebuilders would “rip in the capital” and housing supply would “pick back up really aggressively” from pandemic‑era lows—also did not materialize in the way implied. Housing starts did rise above late‑2010s levels in 2021–22 (about 1.60 million starts in 2021 and 1.55 million in 2022 vs. 1.29 million in 2019), but then declined to 1.42 million in 2023 and 1.37 million in 2024, with overall construction in 2025 dropping to its lowest level in roughly five years amid high mortgage rates and tariff‑driven costs. (ipropertymanagement.com) Multiple analyses in 2023–24 still find a structural housing shortfall on the order of 2.5–3.8 million or more homes nationally, and broader housing‑crisis work cites a 4–7 million unit shortage as of 2024, indicating that new construction has not closed the gap and that supply remains constrained rather than having surged enough to normalize the market. (realtor.com)

Taken together, the core narrative—that post‑COVID inflation would mostly be a brief head fake and thus clear the way for an aggressive, sustained homebuilding boom that sharply alleviates U.S. housing scarcity—has not played out. Inflation proved prolonged and policy‑significant, and although building increased somewhat, it fell back and left a large, widely‑documented housing shortage. Therefore the prediction is best classified as wrong.