The Milk Road Show Why This New Macro Cycle Will Break the Fed's Playbook w/ Jim Bianco
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Jul 16, 2025 
Jim Bianco, a legendary macro analyst with over 30 years of experience, shares his sharp insights on the shifting economic landscape. He argues that 2020 marked the beginning of a new economic cycle that central banks aren't prepared for, discussing the implications of sticky inflation and rising tariffs. Bianco speculates on the potential firing of Fed Chair Powell and critiques the Federal Reserve's approach to interest rates. He also delves into the role of stablecoins and highlights the critical importance of the bond market in this evolving scenario.
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New Economic Cycle Since 2020
- The U.S. economy changed fundamentally after 2020 due to recession, remote work, and deglobalization.
- This new cycle includes stickier inflation and higher interest rates unlikely to revert to pre-2020 norms.
Fed's Inflation Belief Discrepancy
- The Fed publicly targets 2% inflation but likely doesn't truly believe inflation will return there soon.
- This disconnect affects their monetary policy decisions and readiness to accept sustained higher inflation.
Tariffs Fueling Higher Inflation
- Tariffs act as a tax raising prices and contribute directly to inflation, which will push inflation and interest rates higher.
- Tariff revenues have surged, meaning consumers will face higher prices going forward.