#428 Jim Bianco: After 6 Years Bearish, I’m Finally Turning on Bonds — Why 5% Is the New Normal

Jim Bianco, president of Bianco Research, joins Julia La Roche in studio for the first time in a year with a big shift: after six years of being bearish on bonds, he’s turned neutral and even launched a bond fund. He argues 5% yields are fair value, not a crisis, because we’re now in a world of 3% inflation and 2% growth. He says that world exists by choice: Washington won’t let cheap Chinese goods back in, as shown by the $15,000 Chinese electric car the U.S. has effectively banned, and wage-driven services inflation stays sticky. On the midterms, he says the key question is whether moderate Democrats can outvote the Democratic Socialists. Bianco also explains why Silicon Valley thinks it has too little compute while Wall Street fears it has too much, why he thinks banks are blocking AI agents to protect $120 billion a year in profits, and why AI is a bubble with years left to run. He explains why a divided Fed under Kevin Warsh is a good thing. And his contrarian call: the labor market is fine, because with a shrinking workforce the economy needs only about 30,000 new jobs a year.

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Links:  

BiancoResearch.com  

BiancoAdvisors.com

x.com/biancoresearch

Timestamps

0:00 Preview: a low-risk entry for bonds

0:19 Welcome Jim Bianco

1:02 Why he turned on bonds after six years

3:25 What would make him bullish

4:14 A value call, not a call for lower yields

6:54 How high would yields have to go?

7:23 The biggest risk: inflation

11:42 Why 3% inflation is a choice

12:10 The $15,000 car America won’t let in

14:20 Why services inflation stays sticky

15:16 Get used to 3% inflation

17:57 Midterms: which Democratic Party wins?

21:16 What it means for markets

22:39 Last week’s drawdown: Silicon Valley vs. Wall Street on AI

25:52 Why personal AI agents are game changers

27:37 Why banks are blocking AI agents

29:19 Amazon vs. Perplexity

31:28 Is AI a bubble?

33:46 A genuinely different Fed under Warsh

35:50 Does a divided Fed mean more volatility?

38:35 Contrarian call: the labor market is fine

40:31 Why we only need 30,000 jobs a year

42:33 Wrap-up

The content of this podcast is provided for informational, educational, and entertainment purposes only and does not constitute financial, investment, tax, or legal advice. Nothing discussed should be interpreted as a recommendation or solicitation to buy, sell, or hold any security. Guests' views are their own. Always do your own research and consult a qualified financial professional before making investment decisions.