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James Bianco on Bloomberg

board roomJame Bianco is President of Chicago Based Bianco Research. While not strictly an “Austrian” economist/strategist, he has long been writing and commenting on topics concerning Austrians such as credit expansion, central banking policy, politics and economics. He is certainly in the category of under the radar gurus (as in legitimate guru, not the carnival barker type) that you should pay attention to.


Mr. Bianco appeared on Bloomerg TV Tuesday morning (12/20) to share some end of the year thoughts. While video is not currently available the following summarizes his conversation:


The markets are expecting two rate hikes for 2017, but the Federal Reserve is looking to prepare the public for three. The Fed is afraid to defy market expectations because of what happened in 2008.

Read: After a Tough November for Bonds What’s Next for Investors?

Big question for 2017: We are in a reflation period, but what are we reflating? Real growth or inflation? Right now stocks and bonds are giving us two different answers. “Stocks think we are inflating real growth earnings are going to come back and that’s bullish.” Meanwhile the bond market rising yields are about rising inflation, so which market is right? Mr. Bianco is of the opinion that between the stock and bond markets, bonds are usually right. If that is the case this time, eventually stocks should be expected to react negatively.


At end of the year markets do weird things due to year end effects including light trading volume. Last year the Fed raised rate on December 16, and markets were calm for two weeks before the carnage hit.

Read: What is a Core – Satellite Investment Strategy?

Video or the interview will be posted if it becomes available, in the mean time if you happen to see the name James Bianco on the screen, or in the story, be sure to pay attention.


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DISCLAIMER: Nothing in this article should be construed as a personal recommendation or advice. Nor should anything in this article be construed as an offer, or a solicitation of an offer, to sell or buy any investment security. Barnhart Investment Advisory clients and principals may hold positions in any securities mentioned in this article. Investors should conduct their own due diligence and seek the advice of a financial and/or investment professional before making any investment decisions.


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