Making Markets
Jim Bianco: The New Normal - [Making Markets, REPLAY]
Apr 12, 2024
Jim Bianco, Founder and President of Bianco Research, shares his contrarian views on interest rates, the impact of global events on inflation, the influence of housing inflation on the economy, and the effects of remote work on spending and inflation. He also discusses his new fixed-income ETF, Crypto, the Red Sea crisis, and the potential of DeFi to revolutionize financial services.
01:00:05
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Quick takeaways
- Jim Bianco forecasts a bear market in bonds with interest rates potentially rising to 5.5%, driven by inflation and real growth dynamics.
- Bianco highlights the potential inflationary impact of the Red Sea Crisis on global trade and supply chains, posing challenges and disruptions to goods prices.
Deep dives
Contrarian View on Interest Rates
Taking a contrarian stance on the trajectory of interest rates, Jim Bianco predicts a bear market in bonds and foresees interest rates rising to potentially reach around 5.5%. Bianco's perspective is rooted in a shift in the inflation cycle towards a more persistent and higher rate environment, with a natural inflation rate hovering around 3% to 4%. By aligning nominal GDP growth with interest rate projections, he posits that the 10-year Treasury yield could reach 5.5% later in the year, driven by a combination of real growth and inflation dynamics.
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