In Episode 397 of Hidden Forces, Demetri Kofinas speaks with Jim Bianco, President and Macro Strategist at Bianco Research, about the macroeconomic factors driving the recent rise in bond yields and a range of other variables shaping the economies of the U.S., Europe, and China, as well as their impact on investors’ portfolios.
In the first hour, Bianco and Kofinas analyze the factors behind the surge in long-term interest rates across the developed world. Their discussion covers the Federal Reserve’s role, concerns about government debt and deficits, inflation, tariff policies, and economic growth expectations amid these potential challenges.
In the second hour, they shift their focus to the implications of these changes for investors. They explore the resilience—or lack thereof—of the traditional 60/40 portfolio and strategies for mitigating portfolio volatility in a market environment where stocks and bonds increasingly move in tandem. Additionally, Demetri and Jim examine the drivers of U.S. dollar strength, the risks posed by U.S. equity concentration, the potential for a recession, and what the continued decline in Chinese bond yields suggests about the state of China’s economy.
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00:00 Introduction
02:39 Jim Bianco’s Career Journey
07:45 Current Bond Market Analysis
13:56 Global Economic Comparisons
16:07 Challenges in the German and Chinese Economies
19:00 Interest Rates and Inflation
28:29 Understanding Inflation Rates
33:18 Historical Recessions and Economic Changes
35:12 Post-COVID Economic Reboot
37:22 Federal Reserve’s Inflation Target
44:23 Potential Economic Disruptions
54:00 Topics for the Second Hour
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Producer & Host: Demetri Kofinas
Editor & Engineer: Stylianos Nicolaou
Follow Demetri on Twitter at @Kofinas
Episode Recorded on 01/14/2025
