Of the many moving tributes to Charlie Kirk, this one sticks out …

I’ll start.

Charlie was a seeker of the truth in a world where truth has been inverted. He was a man of courage. A man of God. And he was targeted for it — because he was effective.

If we look at the numbers, among 18–29 year-old men, voter preference swung from +26 Democrat in 2023 to +18 Republican in 2025. That’s a 44-point swing in two years. Charlie was the force behind that change.

He was effective resistance to the “progressives‘” ongoing cultural revolution, and he was silenced.

Yet as Scripture shows, persecution never silences truth — it amplifies it.

That brings me to the bigger picture — the “why” behind so much of the disruption and chaos we’ve all lived through over the past five years.

We’ve talked often in these notes about the strategy behind the Trump tariffs/ “trade war.”

At its core, it has always been about China.

For decades, China has manipulated its currency to undercut global competitors, corner export markets, and build the world’s largest war chest of foreign currency reserves.

What did they do with that capital?

They used it to buy global influence (including inside the U.S.) — in politics, academia, corporations, media, and medicine.

And they expanded economic warfare into what is now “hybrid warfare”: economic, psychological, biological, informational, political, and cyber.

It’s no secret that the Chinese Communist Party (CCP) has an explicit goal of global dominance. Against that backdrop, it’s not difficult to connect the dots and see their fingerprints on the societal deterioration of the West.

It’s the Mao Zedong playbook.

Mao’s Cultural Revolution (1966–1976) was built on the idea that revolution must be continuous, that culture itself had to be torn down to make room for the Party’s control. It meant erasing traditions, mobilizing youth against authority, dividing society into oppressors and oppressed, and keeping the population in constant turmoil.

Here’s how ChatGPT maps it against events we’ve seen in the U.S. since COVID:

Mao engineered chaos and cultural destruction to centralize control and remake identity.

In the U.S., post-COVID, while the context and severity differ (no mass famine, labor camps, or Mao-level death toll), many tactics are similar: reliance on perpetual crisis, use of youth activism, identity-based division, removal of monuments, ideological conformity enforced via social and corporate pressure, and historical revisionism to reshape collective memory.

The jobs picture took another blow this morning.

The Bureau of Labor Statistics (BLS) revealed a huge downward adjustment to the job growth that was reported over the March 2024 to March 2025 period.

In this scheduled annual revision 911,000 jobs were erased from the records.

If we distribute that equally across the already twice revised job growth data for the twelve months through March of this year, we get the chart below … 

It’s now updated with August payrolls, and the revisions of the prior two months.

We now have a job market that has averaged just 27k net new jobs over the past four months.  For context, the five-year period prior to the pandemic was 182k.

Add this to the OVER-reporting of jobs in the first seven months of the year, and clearly this is not the job market the Fed has been incorporating into its policy making decisions.

And with that, the question is:  would the Fed have cut rates earlier this year had they been privy to the numbers in the final revision column of the table above?

Let’s do an experiment.

If we ask ChatGPT to play the role of an FOMC voter, with the Fed’s publicly stated policy making framework in mind, how would it have voted in its June meeting (at that point-in-time), given the knowledge of the actual payroll numbers (i.e. the final revisions)?

Below is the actual data heading into that June meeting — and the week prior, they would have gotten a reading on May CPI of 2.4%.

Remember, the Fed has admittedly been in a restrictive stance (putting downward pressure on the economy), and claims to be “data dependent” (led by the data).

So, here’s the vote from ChatGPT …

On June 18, 2025, with the data you’ve laid out, the FOMC’s decision calculus would look like this:

FOMC Assessment

Inflation:

• Near target. No evidence of re-acceleration. CPI/PCE converging at ~2.4%.

• Inflation expectations remain anchored.

Employment:

• A +19k print (knowing it’s final) is essentially zero jobs growth.

• This signals labor demand slackening abruptly.

Policy Stance:

• At 4.33%, policy is restrictive relative to inflation outcomes.

• Real rates are too high for a labor market already showing cracks.

Decision

Cut by 50 bps (to ~3.8%).

Reasoning:

• A 25 bps trim risks being behind the curve when the labor market has stalled.

• Inflation data gives you cover: at 2.4%, you’re not reigniting price pressures.

• A bold move signals you’re serious about the employment half of the mandate, while still leaving real rates positive.

Bottom line: On June 18, with PCE at target and jobs collapsing, the FOMC would almost certainly deliver a 50 bp cut and open the door to more if the labor data deteriorates further.

So, based on the Fed’s policy making framework, and the conditions of the economy based on the actual (final) data, ChatGPT thinks it warranted a 50 basis point cut in June. (xAI’s Grok said 50, Google’s Gemini said 25 and Anthropic’s Claude said 25).

Instead, the Fed held steady, on the false belief (in their words) that the “labor market conditions remain solid.”

Now we head into the September Fed meeting next week.

And we now have clear evidence of the deterioration in the labor market.  But we have an uptick in inflation, which we may find on Wednesday will be as much as half a percentage point higher than June (as measured by CPI).

Will the Fed make up for its late start (i.e. deliver the 50bps cut it missed)?  The market is pricing in only about a 10% chance.

But that positioning may change tomorrow.

The BLS is expected to make a big one-off downward adjustment to the jobs picture, in its scheduled annual “benchmark revision.”  A year ago, it slashed 818k jobs in this revision.  Bessent said over the weekend he thinks it could be a similar number in tomorrow’s revision.

We get the jobs report tomorrow.

Remember, the report last month had huge downward revisions (i.e. job creation has been over-reported).

And we looked at this graphic on the reporting for the year …

The Bureau of Labor Statistics (BLS) has overshot job growth on its initial report seven consecutive months — nearly half a million jobs.

Remember, the Fed is tasked with setting policy to achieve price stability and full employment.  So, the most important data point in assessing one part of its mandate has been misleading.

And misleading reporting has been a trend, not an exception.

And it has led to very, very costly policy mistakes.

From the unreliable jobs data over the past several years, we’ve gotten reckless fiscal spending in 2021, when the economy was already running hot/ inflation was already on fire.

And then later (2023-2024), we got all of the debt from the trillions of dollars of government spending, and a devalued dollar, but only a fraction of the economic growth — because the Fed had its foot on the brake, with an inaccurate picture of the health of the economy.

And it has continued this year, leading to Fed policy that has been a headwind to pro-growth fiscal and industrial policy.

But regime change is coming at the BLS.

Trump’s nominee to head the BLS should go through Senate confirmation hearings this month.

As for tomorrow’s data, the credibility has been shot.  But the market probably reacts to weaker numbers, and likely ignores any positive surprise.

We get July PCE tomorrow (change in the personal consumption expenditures index).

Remember, the Fed’s stated measure for its 2% inflation target is headline PCE (not core PCE, not CPI).

June’s number was 2.6%, and with July CPI and PPI already reported, we should expect little change in tomorrow’s print — likely another 2.6%.  

As you can see in the chart above, we’re at the top end of this sideways range in PCE of the past year.

It’s not 2%.  But it’s a long way from the 4.33% — the effective Fed Funds rate.

That differential of roughly 1.7 percentage points between the Fed Funds rate and the inflation rate represents “restriction” — downward pressure on the economy. 

That said, the second reading in Q2 GDP just came in this morning at annual rate of +3.3%.  That’s the highest growth in more than two years.  And it’s above the long-run growth rate of 3.1%.  

So, that’s above-trend-growth even as the Fed has its foot on the brake, slowing economic activity.

And that above-trend-growth comes prior to any impact from the “big, beautiful bill” which delivers full expensing on capex and R&D — a major tailwind for investment and productivity in the second half of the year.

Let’s talk about Nvidia earnings …

As we’ve discussed for much of the past two years, data center revenue has been telling a very clear story.  There’s a supply issue.

For seven quarters, data center revenue grew at a pace of about $4 billion a quarter – as if it were fixed.  

And that put Nvidia’s growth rate on a steep downward slope, as seen here:

As we discussed last week, the annual economic symposium in Jackson Hole has historically served as a platform for central bankers to communicate important signals regarding policy adjustments. 

With that in mind, this past Friday Jerome Powell made a long speech, where he covered the evolution of the economy and monetary policy since his last speech in Jackson Hole, a year ago.

He stepped through the state of the economy, how tariff and immigration policy have affected the Fed’s outlook, and then he said this:  “the shifting balance of risks may warrant adjusting our policy stance.”

What is “shifting?”

The labor market.  

So, the Fed has gone from thinking the labor market was “in balance” — not a problem — to admitting only weeks later that it’s a recession risk.

And with that, given the Fed is in a restrictive stance (putting downward pressure on the economy), the risks in the labor market “may warrant” removing some of that restriction.

Now, this was far from the explicit signalling Powell gave last year, when he said: “the time has come for policy to adjust.” 

Nonetheless, markets responded on Friday like it was a pivot. 

Yields went down.  The dollar went down.  Stocks soared, especially the more interest rate sensitive small caps.

As we discussed earlier in the month, given the cracks in the labor market, this environment where fiscal and industrial policy has a foot on the gas pedal, while monetary policy has had a foot on the brake, is about to change.