Jim Bianco

2/2 This is my worksheet for the vote tally. I currently have the voting for a possible September 16th hike at 5 (hike) - 5 (hold) - 2 (unknown) The two unknowns are Chris Waller, who speaks on September 3rd, and Jay Powell, who will not speak A 58% probability of a hike aligns with a vote tally of 5 - 5 - 2 because Waller is expected to say he is also in favor of a hike (on September 3rd). Restated, Waller's public appearance this coming week is as important as Warsh's at Jackson Hole in determining if the Fed will hike on September 16. Two follow-up thoughts Too many are OVER-analyzing Warsh's words and not appreciating that he is no…

1/2 "The Bond Market Can Stop Panicking When The Fed Starts Panicking" --- 3-day tick chart of the 30-year yield "Bond Traders are panicking a little less" https://t.co/XV1flvtQst 2/2 Probability of a September hike now 49%, up from 36% right before the speech dropped The Fed is panicking a little more. -- Restated, if the Fed does something about inflation (hike), bond yields can stop rising. https://t.co/xYgn29xp5f

1/3 In the thread linked below, I argue that the bond market is worried about inflation. I can hear the response that inflation swaps and/or TIPS Inflation Breakevens are not reflecting this. Maybe they are! 🧵 2/3 The 5-year TIPS inflation breakeven rate is the market’s pricing of the average annual inflation rate over the next 5 years. It has averaged 73 basis points higher post-COVID (blue) than pre-GFC (red). Also note that the standard deviation range (shaded) post-COVID is completely above the standard deviation range pre-COVID. Inflation expectations have stepped higher. Inflation expectations are saying the post-COVID environme…

2/3 Bond buybacks, yield curve control, and/or QE (or "QE-lite") all expand the Fed's balance ("money printing"). When inflation is the worry, money printing means bonds sell off. How Bessent is doing it is not the problem. Doing it with inflation means it will not work. https://t.co/8wgAv709sH 3/3 From the pod From 2009 to 2021 (12 years in red), only 5 months had inflation above 2% (3 in 2012, 2 in 2018). Currently (blue), we are in the 65 consecutive months above 2% (and actually above 3%). This is not the 2009 to 2012 cycle. We have to stop pretending it is. https://t.co/2sIbGdeITH

The central bank of AI just announced hike via forward guidance before the Fed. https://t.co/M59bqNeuY8 So which central bank announcement is more important. AI Chairman Jensen Huang announcing a hike yesterday? Fed Chairman Kevin Warsh speaking at Jackson Hole later this week? Don’t laugh, it’s actually a serious question!

I believe he is telling you he believes the rise in yields is about the price of oil. (Get it down, and yields go down too) The problem is that yields (orange) are powering higher even as oil (blue) is well off its spring highs. More than oil is pushing yields higher. https://t.co/dQ08sqKfbh

I agree, the market needs to start looking at the price of the stuff we use, distillates (gasoline/diesel), and not the raw material to make it (crude oil). Diesel prices are soaring, especially in Europe. Consider that Russia/Ukraine might matter more for energy markets. -- Gasoil continues to soar in Europe, as the chart below shows. Gasoil is now well above May’s peak (when crude prices were over $140 per barrel). Europe gets its diesel from Russia, and Ukraine keeps blowing up their refineries. Russian refinery output is down by more than half, and they’re no longer exporting diesel, and there’s a real shortage in Europe right now. -- …

Gasoline prices are highly seasonal and should be falling through the end of the year. The black line is 2026, and it's now 20 cents higher than any price seen between now and December 31. https://t.co/OhLUDmWt79

We often say that every recession changes an economy, so the subsequent recovery is different than the previous recovery. And we are clear that different is not worse. (The corollary of “economic expansions do not die of old age, they are murdered.”) The thread below lays out several post-COVID differences. All of them point to more inflation, which we have had for several years (core PCE is now in its 65th consecutive month above 2% and even above 3%, compared with just five months in total between 2009 and 2021). This inflation means the tools of 2009 to 2021 not only don’t work, but actually make things worse. * Cutting rates to zero (o…

My English cream-colored golden retriever during the Fourth of July celebration. She thanks all Belgian Malinois' who do the hard things to keep our country safe? https://t.co/4xuDHFMOHj

*US 30-YEAR TREASURIES ERASE GAINS FROM BUYBACK ANNOUNCEMENT https://t.co/MMbtHrGXvD

https://t.co/8PYfxhHrUR

Incoming Berkeley MBAs asked a series of questions during orientation this week. I'm shocked his positive ranking was even this high. @DavidSacks @Jason @chamath @friedberg https://t.co/89C1X4iSCD

I've been saying "bond traders can stop panicking when the Fed starts panicking." I guess I should have said, "bond traders can stop panicking when Scott Bessent starts panicking." *TREASURY DEPT ANNOUNCES INCREASED SIZES OF LONG-END BUYBACKS *LONG-TERM US YIELDS DROP ON TREASURY PLANS TO BOOST BUYBACKS Three-day tick chart of 30-year yields.

Last week, Vice President Vance said on the @willcain show: "That's goal number one. Keep oil and gas cheap for Americans all over our country." --- Note that he said goal number two was stopping Iran from getting a nuclear weapon. This is consistent with the view I picked up from @Geo_papic ... oil is the independent variable in the war, not the dependent variable. This means @potus wakes up every morning, looks at the price of oil, and that dictates his prosecution of the war. Not the war dictates where the price of oil will go. @potus is trying to manage oil prices first, the war second. Understanding this will clear up a lot of th…

As the probability of a Sept rate hike shrinks (red), the 30-year yield (blue) continues to make new 19-year highs (back to 2007), now 5.29%. As I write, WTI crude oil is only up 33 cents today. This is not a reaction to that market. -- "Bond traders can stop panicking when the Fed starts panicking." The high yield in the 30-year will come when the Fed finally panics and hikes rates.

Just 13% of U.S. large-cap funds have outperformed indexes over the past decade - “If you look at active equity mutual funds, they’ve had outflows every year consistently since 2015,” ... “That’s a losing trend only compared to the New York Jets.”

I’ve argued that Dario Amodei of Anthropic and Sam Altman of OpenAI have "oversold" the transformative (and disruptive) power of their companies in ways that lead many people to believe most other businesses and investments will be worth far less. They may have done too good a job. That messaging helps explain some of the current pushback against data centers, Senator Sanders’ recent call for AI companies to pause development of advanced models, and the boos and walkouts directed at tech/AI figures at several 2026 graduation ceremonies. Too many people now view these labs as building a jobs doomsday machine. @GavinSBaker’s comments on the…

Rational Dissent Episode 004. The State of the Labor Market Available on YT, Spotify, Apple, Overcast, etc. --- Shifting dynamics in the U.S. Labor Market have everyone from the Fed to recent graduates playing on their heels. Chapters 00:00 - Introduction & Labor Market Equilibrium 03:30 - Demographics, Immigration, and Breakeven Rates 13:00 - Data Quality & Measuring Labor Market Speed Limits 17:55 - Youth Unemployment, Demographics, and Degree Selection 28:37 - AI's Real Impact on White-Collar Jobs & Education 33:34 - How the Definition of Work is Evolving

Brian Armstrong is the CEO of Coinbase. It's a perspective ... I guess https://t.co/g92zFvlxwy

@AndreasSteno @CamKmarkets And two days ago, Kpler said this. https://t.co/LmXJGIoqrV

As I like to say, "Never take your interest rate advice from real estate people.” They only know one thing … rates HAVE TO go lower, and the appropriate rate is 0% to 1%. Oh yeah, the President is a real estate guy. Remind me what he thinks about interest rates??? If you think I'm being hard on real estate people, please look up how it worked out for them in 2008.

A lot of people think this. But it might not work the way they think Explained here https://t.co/rUGhBeiufx (BTW, I love this meme!)

For those who want to be bullish on bonds, do you really want the Fed to NOT hike rates in September? Consider: The red line is the probability of a Fed hike on September 16th. It was above 100% until the July 29th FOMC meeting. It dived at that meeting, also dived on the employment report on August 7th, and on the CPI report this morning. It is currently 39%. The blue line is the 30-year yield. When the probability of a hike was over 100%, this 30-year yield was 5.08%. Now that the probability of a rate hike has declined to 39%, the 30-year yield is 16 basis points higher at 5.24%. See the thread below showing the same relationship has be…

Five ships yesterday, two today (day is not quite over), versus about 120/day pre-war. (spike to 40 was the immediate days after the MOU was signed) --- If this is "total control" over the Strait, what would "loss of control" look like? Just asking. https://t.co/4nR2tck59h

Me on @BloombergTV talking about the Fed and inflation. https://t.co/kRJBaRWKYk

*JOSH KUSHNER, BOB IGER TO BUY LA LAKERS FOR OVER $12B: ESPN -- Did the Lakers' price go up or down after LeBron went to Philly?

I use the AAA data back to 2004 and get exactly the same thing. Since 2004, only two years have seen higher gasoline prices after March 17 * 2022 (red) = the year of 9% inflation (June 2022) *2008 (orange) = the year of the all-time high in WTI prices ($147 in July 2008) https://t.co/Ekmb2Ha7wN If the war is not resolved, 2026 prices (black) will probably trend sideways for the rest of the year and "separate" at a much higher level into the fall/winter. My guess is drivers will notice. Fix the x-axis format on this version https://t.co/OfGDbQOMDh

Rational Dissent Episode 003. Valuations in An Earnings Explosion Available on YT, Spotify, Apple, Overcast, etc. ---- Is the juice worth the squeeze? Earnings keep rising, valuations are questionable, and investors are uncertain. What should you make of earnings these days? Chapters 00:00 Hot Open & Intro 00:51 Why Earnings Confuse 03:54 The Anthropic Effect 07:10 Include Other Income 09:36 OpenAI Next Wave 12:32 Valuations vs Earnings 18:05 Data Sources Diverge 22:42 Quant Models in Trouble 26:05 Vendor Financing History 29:15 CapEx & Bubble Risks 37:10 Lightning Round Fed or Earnings 38:53 Wrap Up & Subscribe

2/5 The chart below shows the 10-year yield since September 18th, 2024, when the Fed started cutting rates with a 50 bps move. In total, they’ve cut rates by 175 bps, with the last cut coming on Dec 10th, 2025. The 10-year yield is 98 bps HIGHER during this period. https://t.co/n9ZkAHso3Z 3/5 How unusual is it for rates on the long end of the curve to rise during a cutting cycle? First, what are the cycles? Below shows several cycles using the funds rate since 1988 and the discount rate before that, going back to 1971. It shows 55 years of Fed cycles. https://t.co/XGksIfYSqd 4/5 Next shows the change in the 10-yr yield from the begin…