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Jim Bianco: The Rate Shock Investors Aren't Ready For - "We're in a 3% Inflation World"

Mar 4, 2026
Guest
Jim Bianco
Jim Bianco, president of Bianco Research and macro strategist on rates and inflation, explains why a 3% inflation world could push rates far higher. He discusses Treasury yields, portfolio positioning for higher neutral rates, commodities and precious metals driven by Asian demand, and Bitcoin’s path from permission to replacement.
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INSIGHT

PCE Rising While CPI Falls Signals Higher Yields

  • Jim Bianco warns a booming U.S. economy plus rising PCE inflation will push Treasury yields materially higher.
  • He highlights an unusual divergence: PCE rising while CPI falls, and Fed officials prefer the rising PCE measure.
ADVICE

Reposition Portfolios For 3 Percent Inflation

  • Position portfolios for a 3% inflation world where neutral funds rate is ~4% and yields may move into the low- to mid-5% range.
  • Expect S&P returns of roughly 0–5% and bonds yielding ~5% to become competitive with stocks.
INSIGHT

The 4-5-6 Market Framework

  • Jim calls the coming regime the 4-5-6 market: cash ~4%, bonds ~5%, stocks ~6% annual returns.
  • He sees commodities and hard assets as fair-value mid-single-digit opportunities, not parabolic bets.
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