Introduces topic: bond market volatility has subsided, which some see as a harbinger for a bond rally. Asks for thoughts.
Phil
Jim Bianco
Confirms bond rally and reduced volatility due to increased certainty, but warns this can change next year based on the new Fed chair mandate.
Asks if it's too early to know where inflation ends up next year, given calm signaled by inflation swap rates.
Phil
Jim Bianco
Argues we are in a '3-ish% inflation world,' not sub-2%. This matters for interest rates and will keep them at current levels or maybe higher.
Asks if AGG (bond ETF) is a buy, given Bianco's concern about the 10-year yield not breaking below 3% and what it means for the secular bull market.
Phil
Jim Bianco
States the secular bull market in bonds ended in 2020. Expects the bond market to 'stall out a little bit in terms of yields going up,' but coupons still provide return.
Asks about the consumer's role next year given poor sentiment but potential for raises, better economy, and tax refunds.
Phil
Jim Bianco
Agrees consumer could rebound, which would be appropriate for higher interest rates. Higher rates are not bad unless the economy is overleveraged.