Huge disruption but no roadmap. European economy more insulated from US market correction due to lower household stock exposure.

We are in a struggle between cyclicality (positive: US resurgent, Europe stable, growth returning) and extraordinary factors (AI cycle stage).

Central banks (BOE, ECB) mention AI investment boom as factor of optimism for growth outlook.

Interest rate differential between Europe and UK hard to explain by macro data alone; UK has political risk premium.

Dollar will be more sticky compared to big slide in Q3. US continues to surprise to upside.

Kevin Warsh likely a lot less hawkish, especially on balance sheet tightening, than his past writings/market expectations.

This week first market sell-off event where dollar rallied—back to standard pattern (maybe thanks to Warsh).

Warsh wants regime change, thinks of Fed as part of economic policy machinery. Won't do silly things early to ruin credibility. Balance sheet shrinkage won't happen overnight/this year.

Big fault line for US is narrowness of growth engine: powered by AI investment (which market is punishing) and consumption by wealthier households via wealth effect.