WTFinance Bond Market Disaster if Powell Cuts Rates with Jim Bianco
Jul 24, 2025
Join Jim Bianco, President and Macro Strategist at Bianco Research, as he delves into the intricate world of finance. He discusses the potential consequences of a Federal Reserve rate cut amid rising inflation and tariffs affecting international companies. The conversation touches on the impact of immigration on wage inflation and the climate of government debt. Bianco evaluates the precarious bond market situation and speculates on the future of stablecoins versus traditional money market funds, highlighting the new economic landscape post-pandemic.
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Tariffs and Labor Market Shifts
- Tariffs are beginning to impact inflation, but it's unclear who bears the costs: consumers, exporters, or companies.
- U.S. population growth is collapsing due to low immigration and fertility, reducing the jobs needed to meet labor demand.
Japanese Automakers’ Tariff Example
- Japanese automakers initially absorbed tariffs by cutting prices, but are now passing costs to consumers.
- This illustrates that exporters may bear some tariff cost temporarily, but inflation will likely rise for consumers over time.
Inflation Dynamics: Goods vs Services
- Goods inflation driven by tariffs may rise while service inflation could fall, but services tend to persistently inflate.
- The Fed's preferred PCE measure may show faster inflation than CPI due to weighting differences.