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James E. Thorne argues that the European Central Bank’s recent decision to tighten policy in response to a supply-driven shock is based on a fundamental misdiagnosis of current economic dynamics.
He explains that a supply shock leads to a change in relative prices rather than a broad inflationary trend across the economy.
Thorne has recently examined how accelerating digital technology may break traditional limits on S&P 500 earnings growth in a prior analysis. He has also discussed optimism for market trends during the AI super cycle and set an S&P 500 target of 14000 in another report. These topics reflect his ongoing focus on structural and technological factors shaping economic outcomes.