Fed’s Next Pivot: Which Assets Collapse First And When? | Jim Bianco

Summary

Jim Bianco discusses the forces shaping markets through the rest of 2026, including Federal Reserve policy, inflation, oil, AI-driven stocks, and crypto. He forecasts at least one Fed rate hike, pushing the 10-year yield toward 5% and flattening the curve, while remaining bullish on AI stocks and viewing bonds as offering acceptable 5% returns.

• Jim Bianco expects the Fed to raise rates at least once in 2026, driven by core inflation staying above 3%.
• The 10-year U.S. Treasury yield is likely to trend toward 5% by year-end.
• The yield curve is expected to flatten as short-term rates rise faster than long-term rates.
• AI stocks are still early in the hype cycle and have room to run before a potential bubble peak.
• The S&P 500 is split into AI and non-AI markets, with AI stocks dominating index moves.
• Bonds may offer an average 5% return, but the secular bull market in bonds is over.
• Crypto is seen as near a trough of disillusionment, with stablecoins as the most promising real-world use case.