Do You Believe the Stock Market or the Bond Market?

Real Vision: Finance & Investing

Real Vision

Business News, News, Investing, Business

4.1 • 1.1K Ratings

🗓️ 19 March 2022

⏱️ 39 minutes

🔗️ Recording | iTunes | RSS

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Summary

St. Louis Federal Reserve President Jim Bullard was the only member of the Federal Open Market Committee to dissent from the decision to hike interest rates by 25 basis points. Bullard wanted 50 basis points, and he’d like to see a fed funds rate of 3% by the end of 2022, not the 1.75% of the central bank’s current forecast. Bullard and Fed Chair Jerome Powell do agree that the economy can handle monetary tightening. And the stock market, with the S&P 500 on the way to its best week since November 2020, seems to accept the Fed’s outlook on growth. But the bond market sees something different – that is, a slowdown. The Treasury yield curve continues to flatten, and the 10-year yield fell below the five-year rate for the first time since March 2020. Meanwhile, war in Eastern Europe continues to sow dysfunction, most obviously in commodity markets. Jim Bianco, president and founder of Bianco Research, joins Real Vision’s Ash Bennington to talk about the Fed, inflation and growth, China and the Russia-Ukraine conflict, and where markets go from here. Want to submit questions? Drop them right here on the Exchange: https://rvtv.io/3tol3RY Be sure to grab your tickets to the Crypto Gathering here: https://www.realvision.com/cryptogathering Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	Welcome aboard this Air France podcast message. Air France and its crew invite you to discover
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0:35.2	Welcome to the Real Vision Daily briefing. It's Friday, March 18, 2022. I'm Ash Bennington.
0:40.5	Join today by Jim Bianco, President of Bianco Research. And there's no one I'd rather talk to today
0:45.7	than you Jim. We were talking a little bit off camera. Lots going on. Fed finally lifts off
0:50.1	the 25 basis point rate hike. We've got a war in Ukraine that seems to continue to get worse.
0:55.6	Upward moves and equity markets. Curve in version. A lot of moving parts out there Jim. Big picture.
1:00.8	How are you thinking about what's happening in markets right now? Yeah, I think it's really going
1:06.2	to be across push pull here. Stock market has had its best rally probably since the January high
1:13.3	in the S&P of the November high in the NASDAQ. At the same time, if you took the stock market out of
1:19.3	the equation and you looked at all of the other markets with rising short rates, a flattening yield
1:25.0	curve, the rebound in energy prices that we've seen off the lows set on Wednesday, the still elevated
1:31.8	commodity markets. You'd think a whole lot hasn't changed from say the beginning of the week or
1:37.2	last week, but the stock market seems to be selling you a completely different story right now.
1:43.2	And that divergence is probably going to be the thing that everybody's going to focus on.
1:47.5	I'll tend to lean towards the other markets as being the tell here, unless on the stock market,
1:54.8	we could discuss that through the rest of the interview. Yeah, let's talk about that.
1:58.5	I should say index performance. I'm looking at a weekly chart here, NASDAQ composite up over 7%
2:03.6	on the week. S&P 500, a smidge below 4% on the week. Dow Jones industrial average up about,
2:10.4	looks like 3.6, 3.7% on the week. These are pretty significant moves. How do you reconcile that?
	...

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