Too tight for the bottom half of America, Too loose for the top.

Craig Shapiro

⁦‪@ces921‬⁩

The Fed’s Policy is Perfect for the Wrong Economy

The Fed isn’t running a neutral policy. It’s running two at once.

Too tight for the bottom half of America, too loose for the top.

And the reason is AI.

10/29/25, 11:01 AM

AI Is the Transmission Breakdown

Artificial intelligence has fractured the old monetary logic.

Normally, tighter policy kills investment.

Now, it accelerates it—because the investment is in automation.

Every dollar spent on AI infrastructure is a dollar spent replacing labor, not hiring it.

The more the Fed tightens, the more firms double down on efficiency to protect margins.

Productivity spikes at the top while labor income stagnates at the bottom.

The Fed’s models weren’t built for this world.

They still assume a single economy—one Phillips Curve, one neutral rate, one feedback loop.

But that loop is broken. Capital and labor no longer respond to policy the same way.

Chapter

Craig Shapiro

⁦‪@ces921‬⁩

Two Economies, One Interest Rate

The lower half of the K-shaped economy—the wage earners, the renters, the credit-card borrowers—live in the real rate world. They feel 7% car loans, 8% mortgages, and $5,000 credit card balances compounding at 25%. Their consumption is slowing,

10/29/25, 11:01 AM

Chapter

Craig Shapiro

⁦‪@ces921‬⁩

AI Is the Transmission Breakdown

Artificial intelligence has fractured the old monetary logic.

Normally, tighter policy kills investment.

Now, it accelerates it—because the investment is in automation.

Every dollar spent on AI infrastructure is a dollar spent replacing labor,

10/29/25, 11:01 AM

Chapter

Craig Shapiro

⁦‪@ces921‬⁩

Loose for Capital, Tight for Labor

The Nasdaq thrives because AI is treated as future GDP.

The working class contracts because AI is treated as present unemployment.

Liquidity flows uphill. The Fed’s balance sheet might shrink, but its effect concentrates.

The result is

10/29/25, 11:01 AM

Chapter 1 to Chapter 14’s an “Easter Egg” at #ch1 to #ch14. Including #ch2 which’s chapter 2 at my house in Napa California

http://www.youtube.com/watch?v=ejeIz4EhoJ0

On 09-09-39, “What They Will NEVER Teach You at Stanford Business School” debuts at 300 w 44th St at New York Fashion Week’s front row
http://www.youtube.com/watch?v=QXIaNZi3mHQ

What A Super Model Can Teach a Harvard MBA About Credit www.slideshare.net/larrychiang/what-a-super-model-can-teach-a-harvard-mba-about-credit

American Express hosts me mentoring you about FICO scores at New York Fashion Week
t.co/inxTmZAj

My video boils down 20,000 hours and moves you to the right on the entrepreneur bell curve
http://www.youtube.com/watch?v=eudADPfTWiE
***********

Steve Jobs Texted me on 650-283-8008 in the same way that Mr Jobs called Bill Hewlett https://x.com/superSaiyanSkai/status/1941392367304761636/video/1

Larry Chiang

Fund of Founders

Founding Stanford EIR

@duck9 alum, Deeply Understood Capital Credit Chinese Knowledge 9

Solo Founder Uber API

650-566-9600 Office

650-566-9696 Direct

Cell: 415-720-8500

650-283-8008 (cell)

Editor of the widely syndicated “What They Don’t Teach at School”
whattheydontteachyouatstanfordbusinessschool.com/blog

CNN Video Channel: ireport.cnn.com/people/larrychiang

Read my last 10 X posts at www.X.com/LarryChiang

Author of #WTDTYASBS a NY Times Bestseller released 09-09-09 at #NYFW on a runway under the tents
whattheydontteachyouatstanfordbusinessschool.com/blog/?s=Ny+times+bestseller

www.fastcompany.com/embed/c0d4562ea2049

52 Cards. Two Jokers. What They DO Teach You at Stanford Engineering
http://www.youtube.com/watch?v=vDBY0GkI3-g

Emergency swings and cutting deals as an 9 year old
http://www.youtube.com/watch?v=OFGY7v9C4G0

Hunter Pence shared thoughts before winning WORLD SERIES’ Game #7
http://www.youtube.com/watch?v=usu0luYy9pw

Too tight for the bottom half of America, Too loose for the top.

About Duck9

Awesome Brands