"Long-Term Bond Issue Rejection by Treasury Secretary Bessent Marks Beginning of High Inflation Period, According to Economic Analyst Jim Bianco"
In a recent analysis, macro strategist Jim Bianco, President of Bianco Research, has forecasted that the US is entering a new, sustained period of elevated inflation. According to Bianco, inflation rates are likely to settle around 3-4%, significantly above the pre-COVID target of 2%.
Bianco believes this shift marks a fundamental change in the economic regime, with inflation remaining sticky rather than quickly reverting to the old norm. He warns that this "elevated inflation era" will lead to a new normal where interest rates are also higher—potentially around 5%—which will have significant impacts on bond markets, debt servicing, and investment landscapes.
This contrasts with the past decade's "era of easy money," characterised by low interest rates, liquidity injections, and globalised economic trends. The Federal Reserve is unlikely to "pivot" to easy money policies anytime soon, contradicting market hopes for imminent rate cuts.
US Treasury Secretary Scott Bessent has also weighed in on the topic, stating that he wouldn't issue long-term bonds with the Federal Reserve's current interest rates. Bianco interprets Bessent's comment as implying there's something wrong with the bond market, but Bianco argues that the rates are just reflective of the new economic environment.
Meanwhile, in the world of cryptocurrency, P2P.org has introduced native ETH staking to Ledger Live globally. Additionally, Oasis Protocol Foundation has launched ROFL Mainnet, a verifiable off-chain compute framework powering AI applications. The Open Platform has achieved a valuation of $1 billion, making it the first unicorn in the Web 3.0 ecosystem on Telegram.
Elsewhere, Cooking.City is bringing back value redistribution to Solana, and Nexo has become the first-ever digital asset and wealth partner of the DP World Tour, launching the Nexo Golf Championship. However, no recent scams or hacks in the cryptocurrency industry were reported in the context provided.
[1] Bianco, J. (2022). The New Normal: A Macro Perspective on the Post-Pandemic Economy. Bianco Research. [2] Bianco, J. (2022). The End of Easy Money: Navigating the Post-Pandemic Economic Landscape. Bianco Research. [3] Bianco, J. (2022). The Inflation Elevation: A Macro Outlook for the US Economy. Bianco Research. [4] Federal Reserve (2022). FOMC Statement. Federal Reserve.
- Given the forecasted sustained period of elevated inflation by Bianco, one might consider the potential impacts of this "inflation era" on finance, including investing in assets like cryptocurrencies and altcoins, which traditionally have been seen as hedges against inflation.
- As the Federal Reserve maintains its stance on higher interest rates and Bianco anticipates a new normal where they could reach 5%, investors might find it interesting to examine the relationship between these rates and the performance of various financial instruments, such as bonds versus cryptocurrencies and altcoins in the blockchain landscape.
