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I'm going to move on to the markets, but on the way to moving on to the markets, I'm going to ask you a question about market forecasting. I'm actually curious when you hear these numbers that we just talked about and just the sheer number of people that are playing the markets right now . Uh, and that's in addition to, you know, the president's teleprompter operator.
What do you think about this in terms of what's happening in the market? So, from the perspective of a mere animal spirit, does that say anything? Is it good or bad that everyone wants to trade everything now? I think what this says, and we've seen it with leveraged ETFs, we've seen it with everything, is that if you lower the barriers to entry in markets where there's significant growth potential, you're going to get a significant reaction.
But is there significant growth potential? Because one of the things we constantly learn in prediction markets is that most people lose. Right. But if you ask an individual fan, well, they're going to think, " Look at the plane going to Las Vegas compared to the plane coming back from Las Vegas." I always compare people who fly there, happy , they look at the positive aspects, and those who return, understand the reality of the odds.
OK? But people like a lottery ticket. Yeah, they really like it, and the fact that you lower the barriers to entry and can bet on so many different aspects of the game allows people to think, “Oh, I specialize in this area. I am going to win in this field." I fully understand that these numbers don't surprise me at all .
But do you think this is good or bad in the long run? I mean, this is a really complicated question. OK? We have a little time. Right. Um, do I think the social implications are n't very big. And you also see it in lottery numbers. Those who are inclined to bet are those who are least able to guarantee losses.
OK? But in general, I think that access to markets is good. And if you provide greater access to markets, that's good. Speaking of markets, one of the things that is exciting right now is that the fighting in Iran is ongoing. Unfortunately, another service member died in the process. But one of the things we're looking at this morning is oil, which is now about 80 to...I don't know if we can turn this board around now ...
88. 88 what? You see Brent right at 88 and crude oil at 82. And yet, by the way, stocks, although obviously Friday was a bad day, um, are up this morning. Does this make sense to you? And when I went to bed last night, Brent was in the 90s. Around the 90s. Listen, we talked about this last week. The fundamental view in the market is that these escalations will be contained.
And this was tested this weekend, because, unfortunately , and this is tragic, we lost servicemen. There has been an increase in attacks from both sides, and yet the market continues to believe it. I think the biggest contrast, and Joe is talking about the gap in the score, is between really bad news and relatively stable markets.
And this combination is very impressive. You don't usually see that combination at all, and even if you look at so- called stable markets, it's an unstable equilibrium. Whether it's 10- year Treasury bonds or the yen. So, it's an exciting time because everything is in balance, but it's very unstable.
Regarding inflation, where do you think we are? What do you think will happen , and how do you think someone like Kevin Warsh should think about all of this? Um, I'm not thrilled that we need three rate hikes. I don't think we'll get any rate increases. I think the worst of inflation is over. So, do you think we will actually see a significant decline in inflation this fall, this winter?
What is your... Yeah, I mean, one constraint is oil prices. And regular oil is above four today, and diesel is above five, and I'm following those two prices. I look at them every day. But if you look at tariff inflation, which is already behind us, most of the oil inflation is already behind us. AI inflation is inflation I can live with, because I truly believe that productivity growth depends on it .
And will it decline because there are so many different details missing right now to make this whole ecosystem work at all? And the question is how long do you think this will last on the one hand, and by the way, there's a flip side, do you think there will be overbuilding on the other hand . So, there is likely to be overbuilding , because every innovation tends to be exaggerated in the initial phases.
We can consider fiber optics. I mean, I'll take you back to each individual innovation. It's still years away from when you wake up one morning and say, "Okay, there's overbuilding going on. " Probably in 3-4 years. So, this could take quite a while. This can take quite a while. It's possible, but we're talking to technical experts , and they believe it's almost impossible to determine where it will end up.
Right. OK? And for that matter, we simply have no imagination. Is this different from the late 90s with fiber optic cable or some other technology? I don't remember, and I should go back and, for example, get the tapes. When you talked to CEOs of companies that build fiber optic cables , did they say, "Oh yeah, we're just building, you know, there's an end state here.
We're going to do this for another year or two, then we'll, you know, put in the railroad tracks, and everything will be fine. And this will stop." This is not true. It's like we're going to be laying railroad tracks forever, and by the way, we're going to have to constantly upgrade them. Yes , I heard you say, do you know where the endpoint is ?
And many people say there is no endpoint, and there is a perfect reason for that. This is not just a general- purpose technology like electricity. This is what James Manyika of Google calls the inventor of inventions. Hmm. And my completely recursive self-improvement. Right. This constantly allows for bigger and bigger things to happen, and it's very difficult to predict.
So I think it's almost impossible to predict the end point of this. Apart from what I believe will be in higher performance, but also in many related failures.
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