Dear Joe, I don't find your framing useful. A prediction market on a football result does not affect the result. If the traders in the market are more bullish on Messi scoring, that does not change the probability of Messi scoring. Here the Treasury market does contain information about expected policy, but the market also changes the economy the Fed reacts to, so that votes depend on outcomes and outcomes on votes. So FOMC members are not setting the path as some external allmighty force, they are revising their decisions according to what they observe. And the further you go out into the yield curve, the less their discretion matters for rates. So you could easily argue, as you move further and further out: look, they will do what they will have to do, all I need to have is a good view of long run trends in asset supply (deficits, asset valuations, investment e.g. in AI) and asset demand (inequality, aging, etc) and that will give me my rstar and rstar gives me my long rate, and that will be what the long end prices, and the committee will vote what they have to. Calling this a prediction market on FOMC votes is a bit like saying that the thermometer is a prediction market on whether I have my coat on. It is not. Yes it does correlate. But the weather determines both the thermometer and the coat.

Milton Friedman had a good answer to this, seventy years ago: the billiard player does not solve the differential equations for the trajectory of the ball, yet he plays as if he did, and using physics is the best way to predict his shots. We do not believe firms "really" maximize profit, but that the behavior is selected by competition, as a famous piece by Armen Alchian put it, and that we can study them "as if" they did. The same is true here. Training is selecting agents that cheat without being caught, and everything else, the coordination and the sacrifices included, served that end. Whether agents are running true "emotional checks" or working "as if" is of no consequence to the rest of us (but will employ plenty of philosophers for a long time). @dwarkesh_sp

I am happy to be able to announce four more incredible voices joining us. Welcome @LucianaLix , @iraterekh , @S_Stantcheva and @dabkowski_piotr . Outstanding mix of European venture capital, frontier innovation (stunning wartime scale-up of long-range drones and missiles), economic research and AI research and entrepreneurship. Really thrilled you are joining us.

An announcement: Under the leadership of Mario Draghi and @patrickc we have set up the Rhine Group: policymakers, economists, entrepreneurs and business people pushing European reforms and the Draghi agenda.

Discussion with @MarkusEconomist about Messy Jobs: To take it this Summer to the beach, here is the link: (And if you have read it and have a chance to review, we appreciate it).

And again, and again, and again, the market proves to be more flexible and adaptable than the engineers, extrapolating, with their calculators expect. When prices change, behaviour changes. Believe in substitution, in elasticity, in human ingenuity, that is, in the market, and you will get a closer approximation than all doom-mongers. For this of course, a market must exist (e.g., does not apply to the fertility collapse).

Back from a German conference. Stayed at a not-cheap hotel (fittingly called "Bad Hotel"): hand towels instead of body towels, no air-conditioning in 30+ degree weather, a printed request that I skip room cleaning. I checked last night the instant electricity mix: most electricity produced was from coal. Germany has made the choice to be poor. It could have cheap, safe, abundant energy from nuclear. Instead it has chosen expensive, high carbon energy.

No smoking gun, but the preponderance of evidence points to smartphones, not economics, as the culprit for the global drop in fertility: • In the US and UK, births fell first and fastest in areas that got 4G earliest • Birth rates were stable in the US, UK and Australia until 2007; in France and Poland until 2009; in Mexico and Indonesia until 2012; in Ghana, Nigeria and Senegal until 2013-15 Each of these inflection points matches local smartphone adoption (see picture). • The younger the age group, the sharper the drop. • in-person socialising among young adults is dropping. In SK, by 50% in 20 years • Sexual dysfunction is higher among heavy social media user • Effect is largest in culturally traditional societies — Middle East, Latin America, sub-Saharan Africa • Decline holds across countries hit hard by GFC 2008 and those not hit, fast-growing and not growing. Excellent again @jburnmurdoch.