Jim Bianco Talks Resilient Inflation, Restructured Economy

Summary

Podcast Summary

Bloomberg Talks: Jim Bianco Talks Resilient Inflation, Restructured Economy

Date: June 10, 2026
Host: Bloomberg
Guest(s): Jim Bianco (Bianco Research), Alexis, Guest Economist

Episode Overview

This episode delves into the persistence of inflation above the Federal Reserve’s target, why inflation remains stubbornly high, and how structural changes post-pandemic have redefined the US economy. Jim Bianco and co-panelists debate whether higher inflation is the new norm, discuss ramifications for monetary policy, and explore the implications for equity markets. The conversation features real-world analogies—from Cubs baseball drama to Knicks playoff discussions—illustrating the intensity and stress that current economic dynamics are putting on markets and policymakers.

---

Key Discussion Points & Insights

1. Sports Pressure as Economic Metaphor (00:25–02:07)

• The episode opens with an analogy between the pressure faced by sports teams (Cubs 2016, Knicks playoff run) and today’s economic “pressure cooker.”

  • Quote:
    “In 2016 with the Cubs, it wasn't a sporting event. It was a milestone in human history... The pressure on those players is so great.”
    — Alexis (00:57)

• This sets the stage for discussing the extraordinary, unfamiliar stress on markets and the economy post-COVID.

2. Inflation’s Resilience & Its Disparate Impacts (02:07–04:04)

• Jim Bianco highlights the longevity of inflation above the Fed’s 2% target, now at 63 continuous months.

  • Quote:
    “It's just not gasoline. It's more than gasoline. I think that the inflation rate is continuing to be problematic... It's actually worse at the lower end.”
    — Alexis (02:25)

• The “K-shaped” recovery: lower-income households face disproportionately higher inflation, especially in food and energy.

3. Structural Shifts: Why Is 2% No Longer Realistic? (03:23–04:04)

• The panel discusses seismic shifts since 2020:

  • Permanent shift to remote work restructuring the workforce and office market

  • Ongoing deglobalization (“America first” policies replacing globalization)

  • The increase in global conflict, highest in 40 years, adding to economic friction

  • Quote:
    “Post-pandemic economy is a work from home economy... a deglobalization economy and unfortunately it's an economy with more war... All of those things are leading to frictions and higher prices.”
    — Alexis (03:23)

4. Impact on Sectors: Agriculture and Diversification (04:04–05:01)

• Farm production costs have surged 34% since COVID, leaving many farms struggling.

  • Quote:
    “Our farm economy is flat on their back because of inflation, right?”
    — Jim Bianco (04:04)

• Many farmers are diversifying by leasing land for solar panels or data centers to stay afloat, as traditional crop farming becomes unsustainable.

5. Is Higher Inflation the New Norm? Should the Fed Change Course? (05:01–06:03)

• Panel consensus is that higher (but not runaway) inflation—possibly 3–3.5%—is now the baseline.

  • Quote:
    “I do think higher inflation is the new norm... not an 8 times Zimbabwe inflation world.”
    — Alexis (05:19)

• The Fed’s longstanding 2% target may be outdated.

• The Fed still calculates “neutral” policy but may need to recognize a new inflation reality.

6. Monetary Policy: Should Rates Go Up, Down, or Hold? (06:03–07:37)

• While there’s no imminent need for hikes, Alexis notes:

  • “It's 100% chance that they're going to raise rates by the end of the year. I think no, they shouldn't be raising rates... But as the market starts to move forward, if we're going to be in a higher inflation world... as a bond investor I can stop panicking when the Fed starts panicking. So if the Fed doesn't feel the need to panic at 4% inflation, then maybe bond investors should start panicking and leave.”
    — Alexis (06:03)

• If the Fed downplays current inflation, it risks unsettling bond investors—who may require more hawkish signaling.

7. Effects on Equity Markets (06:41–07:56)

• Higher rates, if tied to genuine economic strength, need not spell disaster for equities.

  • Quote:
    “They [markets] should approximate a... fair value if the economy's stronger. If the inflation's moving up, [rates] should creep higher. And that's what they've been doing. And as long as they do that, I don't think it should be a problem for the equity market.”
    — Alexis (06:50)

• The “real estate mentality” in equity markets—where lower rates are always desired—needs to shift to an understanding of fair value and fundamentals.

• Alexis anticipates a “modest move higher” in rates bar any large shocks (e.g., massive oil price jumps).

8. Lighter Moment: Knicks vs. Spurs Prediction (07:56–08:13)

• The episode closes with a playful sports prediction:
  • Quote:
    “I'm going to go with the Knicks in seven.”
    — Alexis (08:01)

---

Notable Quotes & Timestamps

• On Structural Inflation:
  “This is a post-pandemic economy... a deglobalization economy... an economy with more war... All of those things are leading to frictions and higher prices.”
  — Alexis (03:23)

• On the Inflation Outlook:
  “I do think higher inflation is the new norm... not an 8 times Zimbabwe inflation world.”
  — Alexis (05:19)

• On Monetary Policy Messaging:
  “As a bond investor I can stop panicking when the Fed starts panicking. So if the Fed doesn't feel the need to panic at 4% inflation, then maybe bond investors should start panicking and leave.”
  — Alexis (06:03)

• On Real Estate Mentality in Equities:
  “Think of interest rates like a real estate guy, right? Lower is always better for whatever reason and and higher is always bad for whatever reason. But that's not the way rates should work... As long as they do that, I don't think it should be a problem for the equity market.”
  — Alexis (06:50)

---

Key Segment Timestamps

• 00:25–02:07: Pressure analogies from sports to markets
• 02:07–04:04: Inflation’s persistence, impact on low-income households
• 03:23–04:04: Why 2% inflation is no longer achievable
• 04:04–05:01: Farm sector struggles & diversification
• 05:01–06:03: Higher inflation as the new normal; Fed’s challenge
• 06:03–07:37: Should the Fed raise rates? Market anxieties
• 06:41–07:56: Impact on equities; recalibrating rate expectations
• 07:56–08:13: Knicks vs. Spurs prediction (lighter end)

---

Tone & Style

The discussion is lively, pragmatic, and occasionally humorous. Market anxieties are balanced with historical perspective and sports metaphors, making a complex economic discussion accessible and engaging.

---

Summary prepared for those who haven’t listened: This episode is essential listening for anyone seeking insight into why inflation remains high, how the economic landscape has changed since COVID, and what this means for interest rates, equity markets, and everyday Americans. The panel is unanimous: expect a new normal of 3–3.5% inflation, and prepare for markets—and central bankers—to catch up to this reality.

Transcript

[Alexis]

Indiana University strengthens tomorrow's workforce with practical, real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them. Learn more at iu.edu impact, Bloomberg Audio

[Announcer]

Studios Podcasts Radio news.

[Jim Bianco]

There's a gentleman, and it's Bill Murray. And it's Thaler of Chicago, the Nobel Laureate. And then there's Jim Bianco, who hang out at Wrigley Field. And as we look to the Knicks and what we're observing in New York, Jim Bianco has lived it. John Lester came to the rescue with Joe Madden. But it was brutal. 1940, 500. Eight years of losing, losing, losing. And that pressure cooker of 2016 is exactly like MSG tonight, isn't it?

[Alexis]

Absolutely. In 2016 with the Cubs, it wasn't a sporting event. It was a milestone in human history. And the pressure on the team, the pressure on the players was so great. They lost all the home games. They won the World Series by winning the away games. I kind of felt that way watching the game three in Madison Square Garden, that it's not just a basketball game, it's a milestone in this city's history. And the pressure on those players is so great. I wonder if they're gonna have to do the same as the Cubs and win this on the road.

[Interviewer]

Were you at game three?

[Alexis]

No, I watched the game three. I was at the Cubs games 10 years ago.

[Jim Bianco]

I mean, what do you think, Alexis?

[Interviewer]

I mean, the pressure sports, I mean, I have to tell you, I fear I hear what you're saying and I kind of feel it a little bit myself. I was watching and it just looked insane. Everybody with their lights on looked like a huge music concert. The sound was just booming. And you just wonder if that, yeah, maybe they want to throw off the spurs, but are you throwing off your own guys in the process?

[Alexis]

You're not disappointing the Spurs. You're only disappoint your home team when you have a situation like that.

[Jim Bianco]

Montreal Canadiens were exactly the same. The young kids up there, these kids are 20, 22 in the frenzy of the Vatican.

[Interviewer]

Even for veterans, it could be a lot. But let's hope you're wrong. Let's get wrong.

[Jim Bianco]

Should we continue on this theme or actually talk about. You are the arch call. Ages ago and lonely with Mohamed El Erian. I'll give him credit, saying inflation will be resilient. What's the quality of our resilient inflation now above 4%?

[Alexis]

Yeah, you know, we should get it above 4%. Today it'll be 63 months that it's been above 2%, the Fed's target. And even core inflation is going to start creeping towards 3%. So it's just not gasoline. It's more than gasoline. I think that the inflation rate is continuing to be problematic. I also think if you were to break it down and look at the so called K shaped economy, it's actually worse at the lower end because they tend to spend more of their income on stuff like food, think beef prices or gasoline prices as a percentage of their income than the higher end. So they're getting a higher inflation rate than even that 4% inflation rate that we're seeing as the average right now. So it's still with us and it's still a problem.

[Guest Economist]

You mentioned 63 months of this inflation. Let's just X out the energy stuff from Iran and stuff like that. What's, what's driving inflation higher than the 2%? And is 2% even a realistic number these days in this economy?

[Alexis]

No, I don't think it's a realistic number, but I think what's driving it is the cycle turned in 2020. I think, you know, every time we have a recession, we come out of a recession, the economy changes. I like to say change. I didn't say dystopian. It's just, it's different. This is a post pandemic economy. Post pandemic economy is a work from home economy that structure restructured the entire workforce, the office market and the way we live because we're at home a lot more. It's a deglobalization economy and unfortunately it's an economy with more war because according to the Institute of War, we've got the most war now in 40 years around the world that we're seeing. So all of those things are leading to frictions and higher prices. And that's the state of the world we live in right now.

[Jim Bianco]

I think one of the realities here. Eric emails in from a child care center in New York. Thank you for that, Eric. And he notes that Pigs and Bianco of Chicago got the inflation call. Right. I look at the farm, I look, you wake up in Chicago, you look south, you look west. It's a whole different view than looking out at the Hudson River. I got since COVID farm production expenses surging 34% as well. Basically our farm economy is flat on their back because of inflation, right?

[Alexis]

Yeah, it is struggling. But one of the things that the farmers have going for them is they've got other Income, I've got a bunch of friends that are in that business. So they, they could put up solar panels, they could work with data centers and they could make income off of a lot of that stuff to kind of keep the farms going. But you're right, if you're looking at purely being a farmer trying to grow corn or wheat or soybeans and make a living off of it, it's very difficult right now.

[Guest Economist]

So this deglobalization, which we all, we, we all grew up with globalization and the resulting lower prices. Now, to the extent that there's a globalization trend out there, America first type of thing, is higher inflation the new norm and does the Fed have to adjust to that?

[Alexis]

Yes, I do think higher inflation is the new norm. And I like to be clear that I think it's like a 3%, maybe 3 high threes inflation world, not an 8 times Zimbabwe inflation world. So when you know, you, when you say inflation, you don't want to give that. But yeah, the Fed does have to start thinking about it in those terms.

[Guest Economist]

But they're not, are they?

[Alexis]

No, because they think that the neutral rate is still 3%. They come up, they arrive at that by saying that the long run inflation rates two plus one for our star, but if that 2% number is closer to three, three and a half, then neutral might be right where we're at right now and that they don't need to be cutting rates anymore.

[Guest Economist]

Do they need to be raising rates? I mean, I'm looking at the warp function kind of suggesting maybe a little bit.

[Alexis]

Oh, it's not even just a little bit. It's 100% chance that they're going to raise rates by the end of the year. I think no, they shouldn't be raising rates. Maybe at next week's meeting they don't have to be that urgent. But I think that as the market starts to move forward, if we're going to be in a higher inflation world, I'll quote Bob Michael, he has a great line that I attribute to him that as a bond investor I can stop panicking when the Fed starts panicking. So if the Fed doesn't feel the need to panic at 4% inflation, then maybe bond investors should start panicking and leave. So maybe they should consider raising rates or at least talking a little bit more hawkish to calm bond investors.

[Jim Bianco]

So then discuss the ambiguity of a level or bianco like higher rate regime on the equity market.

[Alexis]

You know, I don't think it's a, I don't think it's a problem. I think what the president has done is a very good job of telling everybody, think of interest rates like a real estate guy, right? Lower is always better for whatever reason and and higher is always bad for whatever reason. But that's not the way rates should work. They should approximate a they're a little more nuanced, a fair value if the economy's stronger. If the inflation's moving up, they should creep higher. And that's what they've been doing. And as long as they do that, I don't think it should be a problem for the equity market. But now the equity market thinks of it like a real estate person. Oh, they went up. It's bad. So that's kind of the way they

[Jim Bianco]

think we're going to run here. But in 30 seconds. Is Bianco looking for a modest move higher in rates? Are you with Orzag imposing that? We could see a real jump condition.

[Alexis]

I'm looking for a modest move higher in rates. The jump condition would occur if I think a the Fed seems to be dismissive about inflation or be the story today that's got the market down. If we do get something that produces a massive jump in crude oil prices, that could be a job.

[Jim Bianco]

Alexis emails in from the other side of the studio. Knicks are Spurs.

[Alexis]

I'm going to go with the Knicks and seven.

[Jim Bianco]

Just because you're killing me. Seven.

[Alexis]

Seven.

[Jim Bianco]

Jeez. All right.

[Alexis]

Spurs are good team.

[Jim Bianco]

Heard that.

[Alexis]

He's just.

[Interviewer]

I don't want to hear that. But yeah, I do hear you though.

[Jim Bianco]

Go away. Shim Bianco, thank you so much in our studios from Chicago. Greatly appreciated today. He's been just fabulous on this higher inflation regime.

[Announcer]

Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same Premium Wireless for $15 plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to [e-mail]

[Interviewer]

Switch upfront payment of $45 for 3 month plan equivalent to $15 per month required intro rate first 3 months only.

[Alexis]

Then full price plan options available, taxes

[Interviewer]

and fees, extra feeful [e-mail].