Jim Bianco on Why 0% Interest Rates and Money Printing Are Gone for Good - Ep. 881
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I think we're in a different cycle. Money printing, you probably will never see again in your lifetime. Zero interest rates, you will probably never see again in your lifetime. Yield curve control, you will probably never see again in your lifetime. Those are artifacts of the previous cycle.
Hey, all. In today's episode, macro expert Jim Bianco unpacked a series of major shifts taking place across The US economy, monetary policy, and crypto. We started with the significant downward revisions to recent U. S. Job growth data, something Jim believes most analysts are misinterpreting. He gave a great explanation as to why these numbers don't necessarily signal a weakening economy. From there, we zoomed out. Jim argued we've entered a new economic regime, one where interest rates stay structurally higher, inflation is stickier, and the old playbook of zero rates and quantitative easing
Thanks for everyone.
So we recently had a really interesting payroll report. It came in well below forecasts. And then on top of that, there were downward revisions for previous months that showed overall, actually, the average gain over the past few months was only about 35,000. I wondered for your reaction on that and what that means about where we are in this market.
Well, I got a couple of reactions about it. You're right. The big story in the payroll report was those downward revisions to May and June. May went from a 133,000 jobs created to 19. June went from a 147,000 jobs to be created to 14. That's a net decline of 258,000 jobs. That's the second largest two month revision we've seen in forty three years. The only other one that was larger was when we lost 21,000,000 jobs on the month that, the COVID shut down the economy, in April 2020, which is explainable. This one is a little bit less explainable. So it's extraordinary what the number what the nu
It's interesting. Wait, I'm sorry. Just to understand, you said that was your fear, but it also seemed like that was something you were advocating, so I'm a little bit confused. No,
I'm sorry. The the you're right. I said it. I said it. I worded it poorly. Let me say that again. The rest of Wall Street is advocating that the Fed in response to these payroll reports cut interest rates. The market, the Fed fund futures market, right before the payroll report on Friday was giving about a 40% chance the Fed was gonna cut rates in September. Now it's giving it a 90% chance, all based on those revisions to the report. And what the reaction in Wall Street is, they don't know anything about the about the population growth. They still think normal is a 100,000 jobs a month. So whe
Right. So this goes back to some other comments I've heard you say on recent podcasts where you talked about how you don't feel interest rates will return to this 2% rate that was kind of like known pre COVID. You talked about how you feel like that we're in this post COVID world. You gave some examples, one of them being the increase in remote work. But I was just curious, how would you characterize this new post COVID world as part of this reduction in immigration part of that? Or like, you know, what do you what do you think this new normal is or will be?
So every time you have a recession or a financial crisis, and we had both in 2020, the economy changes, and this one changed and it's a very different economy. What's changed about it? Well, I'll give you three things. One is remote work. Prior to the, prior to COVID, about 5% of the workforce was working remotely. In other words, remote is you get paid to do your job away from a central l
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