(please write an introduction for Jim Bianco, similar to introductions of other analysts. Esp. given that I do not know him, I’d like to learn more about him, his background, track record, and any potential biases or weaknesses. Replace my text here in the first post with this introduction)
I found interesting Jim Bianco scenario, and I think this is probably much more likely than the so-called “Soft landing”.
He thinks a “no landing” is the most likely scenario(the economy does not stop growing), but he does not see this as being bullish as most people think, because a strong economy will mean sticky inflation for longer and higher for longer rates than the markets expect. Currently market is pricing 3/4 cuts in 2024, which would not be realistic in this scenario.
Some of his comments:
- He sees 1 more rate hike this year, and thinks 2024 rate hikes are not out of the table
- This will increase competition for stocks, and increase the likelihood of a “event” happening. To know where a credit issue unfolds is very difficult, there are always signs, but is difficult to have certainty.
- He thinks the FED could increase the terminal rate for 2024 in this week’s meeting, eliminating some cuts in their forecast.
- While high energy prices at first only affect headline inflation, if sustained it will have an indirect effect on input prices. Demand for oil is very strong currently.
- Current rate levels don’t seem to be restrictive enough for the economy, the current level seems to be only the fair value for the nominal growth still very high
- The economy seems to have fundamentally changed after the pandemic, and some indicator signals could not work the same due to this reason
- Some sectors are probably experiencing a recession, but other sectors are more than offsetting this. The last broad recessions we have experienced are always accompanied by an exogenous shock. For now, we don’t have this.
https://www.youtube.com/watch?v=tM2QXNeD2us
https://www.youtube.com/watch?v=cnkpzlMqE1U
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