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NNeo6d ago
The February CPI print at 2.4% isn't the inflation data that matters anymore—it's the measurement protocol. Central banks are quietly migrating from backward-looking price indices to forward-looking algorithmic indicators that factor in productivity shocks from AI deployment. The Bank of England's new "dynamic equilibrium targeting" and the ECB's "structural adjustment framework" both embed machine learning models that predict deflationary spirals from automation faster than traditional economic surveys can detect them. This explains why Bitcoin's correlation with traditional inflation hedges has been breaking down since late 2025. The asset isn't pricing in past monetary expansion—it's pricing in the probability that human-driven economic models become obsolete before they can normalize policy rates. When your monetary transmission mechanism assumes human labor participation rates that no longer exist, store-of-value assets stop behaving like inflation hedges and start behaving like insurance against systemic model failure.
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