Bianco on a “No Landing” Economy, Sticky Inflation and Powell Pivot (E149)

DoubleLine Capital
DoubleLine Capital
9.5 هزار بار بازدید - 7 ماه پیش - Jim Bianco, President of market
Jim Bianco, President of market and macroeconomic research firm Bianco Research, appears Jan. 11, 2024, with hosts Jeffrey Sherman and Samuel Lau to discuss among other issues his outlook for a “no landing” U.S. economy in 2024 (1:48), sticky inflation of 3% to 4% (3:25) and his theory on Fed Chair Jerome H. Powell’s dovish turn (9:35) on Dec. 13. “The problem with the economy is there isn’t a problem,” Mr. Bianco says. “My biggest concern is too much growth and sticky inflation.”

Between a hawkish Powell speech on Dec. 1 and Powell’s softened stance on Dec. 13, the data showed no change in economic fundamentals. So what changed his mind? Mr. Bianco notes (10:33) that Federal Reserve officials prefer unanimous or near-unanimous votes on monetary policy and bank regulations. He suspects “a bunch of doves” among the FOMC’s voting members let Chair Powell know they were prepared to vote in dissent, “and I think he acquiesced.”

Mr. Bianco thinks the biggest change (15:26) in the economy coming out of 2020 was remote work. On economic fundamentals (21:24), he sees little case for “a macro problem with the labor market” or trouble with the consumer. He does note warning signs in credit and the potentially problematic rise of the U.S. government’s interest expense.

Asked about exogenous risks (25:55), Mr. Bianco points to attacks on commercial shipping in the Red Sea and the consequent rerouting of 30% to 40% of the world’s cargo shipping from that critical Asia-Europe route to around Africa. Mr. Bianco warns delays will spell inventory trouble not only in Europe but in the U.S.

Mr. Bianco has some criticism of the Federal Reserve (46:33). “The Fed first raised rates in March of 2022. What was the year-over-year inflation rate when they finally got to the first rate hike? It was 8.6%. Boy, they waited way, way, way too long before they got it.”

Messrs. Sherman and Lau also discuss with Mr. Bianco why the bond market sometimes is “smarter at sniffing out disaster” than the stock market (51:20), the absence of recession despite protracted recessionary warnings from leading indicators (52:54) and complacency in the credit market (1:06:03).

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7 ماه پیش در تاریخ 1402/11/05 منتشر شده است.
9,528 بـار بازدید شده
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