Economics & Markets
Tariff instability, price shocks, and AI capital concentration compress planning horizons for non-incumbents.
Signals
Supreme Court 6-3: IEEPA doesn't authorize tariffs. Section 122 reimposed, expires July 24 2026.
150-day cliff creates binary discontinuity. Sustained uncertainty more damaging than tariff level.
ISM Prices at 70.5, highest since June 2022. PMI at 52.4. Fed funds: 53% no-cut through June.
Simultaneous expansion + price surge recreates stagflation diagnostic.
Canada Q4 2025 GDP: -0.6% SAAR. Full-year 1.7%, slowest since 2016 ex-COVID.
First confirmed GDP-level tariff transmission. Pattern validated at macro level.
OECD: AI = 61% of global VC ($258.7B). 1/3 to five companies. 42% seed valuation premium.
Capital concentration is incentive distortion. Five incumbents gain moats from capital access itself.
Graham's Superlinear Returns: exponential compounding + threshold effects.
Builder archetypes compound regardless of cost shocks. Linear pay for nonlinear output is structural misalignment.
Control Surfaces
| Lever | Status | Change | Evidence |
|---|---|---|---|
| Tariff authority | Section 122, 150-day | Deterioration vs IEEPA | SCOTUS 6-3 |
| Input prices | ISM 70.5 | Sharp from 59.0 | ISM Feb 2026 |
| Fed rate path | Holding 3.5-3.75% | More hawkish | Fed futures |
| AI VC concentration | 5 firms, 33% | Doubled 2022-2025 | OECD |
Watchlist
- ConfirmationSection 122 extension legislation before June
- InvalidationISM Prices below 60 in March
- ObservableEU retaliation announcement
Falsifiers
- Congress extends Section 122 multi-year
- ISM Prices reverses in March
- BoC cuts 50+ bps Q2
Key Unknowns
- Fed temporary framing if Section 122 extended
- Retroactivity of IEEPA ruling
- EU retaliation scale
Noise Filter
- Credits for closed source models— Student question
- Graham craft essays— Wrong pillar by keyword
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