Jim Bianco, president of Bianco Research, returns to The Julia La Roche Show for episode 282 to react to Fed Chair Jerome Powell's Jackson Hole speech on Friday. Bianco argues Powell "caved" on rate cuts despite inappropriate conditions, with core inflation above 3% and markets at all-time highs. He explains that the pandemic permanently changed the economy, while Trump's immigration crackdown created net negative population growth for the first time in 50 years, making current job creation numbers of 35,000 monthly actually appropriate rather than concerning. Bianco warns that cutting rates with high inflation risks repeating last year's policy mistake when long-term rates rose anyway, and predicts tariffs will continue weekly rather than being one-time events. Despite concerns, he's optimistic about AI creating net positive job growth and transforming the economy.
This episode is sponsored by Monetary Metals. Visit monetary-metals.com/julia
Links:
BiancoResearch.com
BiancoAdvisors.com
x.com/biancoresearch
0:00 Welcome and introduction
0:38 Big picture reaction - Powell caved and will cut rates in September
1:50 Why rate cuts aren't the right move - interest rates appropriately valued
3:45 Inflation destroys economies - 35-40% of workers not getting 3% raises
6:15 Path to 2% inflation - pandemic changed everything permanently
8:59 Immigration's hidden impact - biggest driver of population growth
10:26 Border shutdown changes everything - net negative immigration for first time
11:53 Job creation numbers make sense - 35,000 jobs fine with no population growth
12:50 Labor force participation - only way to boost jobs is wage inflation
15:11 Long bond implications - tremendous flow into fixed income
16:45 Risk profile investing - boomers should focus on fixed income
17:48 Retail investor dominance - buying every dip since Liberation Day
20:41 Will Powell cut? - 90% probability but market wants limited cuts
22:00 Supply vs demand problem - for hire signs but no applicants
24:03 Biggest risk - tariffs will continue weekly, not one-time event
26:29 AI optimism - will eliminate 50 million jobs but create 70 million better ones