Just minutes away from the last read on
inflation before the Fed's next meeting.
Jim Bianco of Bianco Research writing,
"The problem with inflation is not it is
going to go up. The problem with
inflation is it's stuck in the three
range. We cannot disinflate back to two
unless the economy collapses." Jim joins
us now for more. Jim, good morning.
>> Good morning.
>> Yeah. Begs the question how far this
Fed's willing to take things.
>> You know, that's a good question because
the message of the last 2 years, the Fed
was cutting rates from September 2014 to
September 2016
and 10-year yields went up 130 basis
points. That's the first time in 50
y…
we have to do something about inflation.
3% inflation, being above 2% for 66
straight months, Alex, as you said,
is unacceptable, full stop. And this is
what's driving interest rates higher, as
it should, and this is not something
that we cannot The worst answer we could
give is throw our hands in the air and
say, "I guess we're in a 3% inflation
world, and we'll just have to revalue to
everything like that." Bottom of the pay
will not like that answer, because that
means that the it's acceptable for them
to continually lose purchasing power,
unless you want to start giving them
raises. Problem with giving them raises
is then you cement a 3 t…
[music]
Welcome to Traders the Trader Edge. I'm
Jim Yurio. That's by Chino. Special
thanks to Trady Air for having us on
their hub. That's it's they they're an
amazing company. Also, thank you guys
for following us at
unfilteredinvestor.com. Some of you who
subscribe and just about four minutes
ago I got stopped into the Amazon long
that we talked about in our newsletter.
Bobby, are you in too or no?
>> I am in now. Now that you're reminded me
that the price was good. I got in. I
actually talked about that trade on uh
on Charles Payne's show on Monday. So
it's uh it's pretty much out there so
people know we're doing it.
>> Okay. Good. And the…
Well, one of Wall Street's biggest bond
bears says now might be time to buy
bonds. He turned bullish a couple weeks
ago. Let's bring in Jim Biano, president
of Bianco Research. Jim, great to have
you with us. Um, where in the curve and
can you walk us through the riskreward?
>> Yeah, I um I think that finally the bond
market say from the 5year to the 30-year
all at a 5% yield or higher. first time
in 20 years that that's happened is now
reflective of the overall state of the
economy and that is a 3ish inflation
rate and a 2ish real growth rate. So a
nominal rate of about five. So if you
have a 5% economy and you have 5%
interest rates, that's…
[music]
Hi, I'm Keith McCulla and welcome back
to round two of day one of the investing
summit. We appreciate it. Uh, a little
inside baseball here. Behind the scenes
in the control room, they always ask the
upcoming guest, do you have any, you
know, stocks to disclose? And Bianca
goes, I wish I did.
>> [laughter]
>> Welcome, man. Thanks for thanks for
making the time.
>> Thank you. Yes, everybody wishes they
had more stocks on a day. It's an
alltime high.
>> Yeah, alltime highs. It is what it is. I
mean, no offense, man, but I want to
talk to you more about the bond market.
Yeah, definitely how it relates to
stocks, but the uh very few I mea…
I see the bond market as being maybe
fairly valued now where it was too
expensive for the last six years. The
way I would look at it, if the bond
market is offering me mid 5% yields, I
want to start getting in. If it wants to
offer me high 5% yields, I want to get
in more. If it gets to six, I want to
get in even more. They were too
expensive bonds for six years. That
expensiveness is gone. I wouldn't go as
far as call them cheap, but at least
we've got this reflected. So, a lot of
what I said, the economy is strong,
inflation is sticky. That doesn't sound
bullish for bonds, but I would argue
yes. And now a mid5s [music]
yield reflects that. …