#205 Jim Bianco: On Why The Market Is Signaling The Fed's Rate Cuts Are A Mistake, What's Really Going On In The Labor Market, And Why Inflation Is Here To Stay
Jim Bianco, president of Bianco Research, returns to The Julia La Roche Show for episode 205 to discuss the macro view, why the market is signaling the Fed's rate cut was a mistake, the dynamics of the labor market, and the presidential election. ✨ This episode is sponsored by Public.com. Lock in your 6.6% yield: https://public.com/julia ✨ Paid endorsement for Public Investing, Inc. Not investment advice. All investing involves the risk of loss, including loss of principal. Brokerage services for US Listed and registered securities, options and Bonds in a self-directed brokerage account are offered by Public Investing. ETFs, options and Bonds are available to US members only. *A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 fractional investment-grade and high-yield bonds. The 6.6% yield is the average annualized yield to maturity (YTM) across all ten bonds in the Bond Account, before fees, as of 9/18/2024. A bond’s yield is a function of its market price, which can fluctuate, and a bond’s YTM is “locked in” when the bond is purchased. Your yield at time of purchase may be different from the yield shown here. The “locked in” YTM is not guaranteed; you may receive less than the YTM of the bonds in the Bond Account if you sell any of the bonds before maturity, or if the issuer calls or defaults on the bond. While corporate bond yields should fall in reaction to a Federal Reserve rate cut, we cannot know whether that will be true of the bonds in the Bond Account, how quickly bond yields will respond, or how much they will decline. Public Investing charges a markup on each bond trade. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. Fractional Bonds also carry risks including liquidity risk, interest rate risk, credit risk, inflation risk, and potential tax liabilities. Read more about the risks associated with fixed income and fractional bonds and learn more about the Bond Account at https://public.com/disclosures/bond-account. Links: BiancoResearch.com BiancoAdvisors.com x.com/biancoresearch 00:00 Intro and welcome Jim 01:00 Analysis of Fed's 50 basis point rate cut and market reaction 04:27 Discussion of labor market and population growth impact 06:53 Analysis of ADP data and small business employment 09:11 Impact of immigration on economic statistics 11:20 Fed's political vs partisan nature in rate decisions 14:13 Explanation of "no landing" economic scenario 17:06 Outlook for bonds and inflation impact 19:59 Stock market return expectations 22:25 Bond market competition with stocks 23:33 Demographics and bear market discussion 26:28 Analysis of election betting markets and probabilities 31:41 Inflation outlook regardless of election outcome 33:04 Discussion of inflation rates vs cumulative price increases 37:11 Implications of a 3% inflation world 40:48 Closing remarks and information about Bianco Research