Even for stock investors, there may be no escape from the bond market turmoil.
Jim Bianco warns that Federal Reserve policies to control inflation will cause widespread losses on Wall Street.
The president of Bianco Research told CNBC on Thursday that this will hurt all financial assets eventually.
Bianco became bearish on stocks late last year due to inflation risks. He blames the Fed for waiting too long to end its easy money policies.
The call last year that inflation would be well-contained is one of the worst forecasts in Federal Reserve history.
He is concerned about the costs of the catch-up.
They don't intend on creating a hard landing. Bianco said that they intend on reining in prices. How are they going to do that? They are going to slow demand down.
According to Bianco, the Fed's only solution is to get wealthy people to stop spending money. The central bank is likely to make bold moves.
The bond market knows it. The carnage is epic, he wrote in a recent thread.
Bianco expects a 50 basis point hike at its next policy meeting on May 3 through May 4.
Until the Fed raises rates too much and breaks something, it will be 50basis points. They will be done. He said that the stock market will not go back to 25.
The Fed knows the stakes are high, according to Bianco.
They don't want to make a mistake in the other direction by being timid. Bianco said that they don't want to create a broken market. They don't want a recession. It is very likely that you will create a mistake if you go down that path.
There is no truth to this.
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