Dennis DeBusschere: The Economy Must Respect The 'Speed Limit'

DeBusschere says AI CapEx and resilient consumer spending are pushing growth above its 2% "speed limit," justifying Fed rate hikes and rising 10-year yields.

• Fed hikes, DeBusschere approves: New Fed Chair Kevin Warsh's first move was a rate hike (not cut), justified by 6.5% nominal GDP, 4.1% unemployment (below Fed's own 4.3% forecast), and inflation risk from an economy growing above its ~2% "speed limit."
• AI CapEx distorts everything: Citing Semianalysis, DeBusschere flags $11.5 trillion of cumulative AI CapEx through 2030, $7 trillion debt-financed, adding 70-100bps to GDP and pushing 10-year yields toward 5% (from 4.3% in April) via supply competition with Treasuries.

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