Jim Bianco: Why I’m Finally Buying Bonds After Six Years
October 18, 2026
AI Summary
5 min readJim Bianco, the longtime bond bear who spent six years warning that yields were too low relative to the economy, finally turned constructive on Treasuries in early October. His reasoning was not a recession call. It was a simple arithmetic claim: every yield from the three-year to the 30-year now carries a five-handle—above 5%—which, for the first time since before the pandemic, puts them in the neighborhood of where they should be given nominal GDP growth of roughly 5–6%. “Bonds are no longer expensive,” Bianco says. “I am arguing that they are no longer expensive.”
Why yields finally look fair
Bianco’s framework for the fair value of long-term Treasury yields is straightforward: they should approximate nominal GDP growth, which he pegs at about 3% inflation plus 2% real growth. For most of the post-2022 period, yields were still adjusting upward from zero, meaning bonds were priced for a world that no longer existed. By early October, however, the adjustment had run far enough that the risk-reward flipped. “I will step up and own longer durations… because I want to capture those yields and I perceived that my risk of loss, that rates go even higher from here, it's always possible, but I thought it was a good risk-reward ratio.”
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
Never miss an episode of Monetary Matters with Jack Farley
Get every new episode summarized in your inbox — free, ~5 minutes to read.
No spam. Unsubscribe anytime.
What you'll learn
- 1 Timestamped Outline
- 2 (00:15) **Introduction: Two Panics in Fixed Income** - Jack Farley frames the episode around two concurrent spasms in bond markets: surging long-term Treasury yields and a selloff in AI-related credit like CoreWeave bonds.
- 3 (01:48) **Jim Bianco Turns Bullish on Bonds for First Time in Six Years** - Bianco announces he became constructive on bonds in the last few weeks, arguing they are no longer expensive even if not yet cheap.
- 4 (04:07) **Why the Bond Bear Market Is Likely Over** - Bianco explains that the worst of the drawdown is behind us, using the math of what it would take to produce another decade of negative returns.
- 5 (06:52) **The Inflation Framework: Why We Are Stuck at 3%** - Bianco lays out his structural argument that goods deflation is over, locking inflation in the low-3% range.
- 6 (11:11) **The BYD Example: Why Goods Deflation Won't Return** - Bianco uses Chinese electric vehicles banned from the US to illustrate the political impossibility of returning to cheap imports.
- 7 (13:13) **The Hidden $200 Oil Price** - Bianco explains that effective oil prices are already at $200 when accounting for disrupted shipping and military security costs in the Strait of Hormuz.
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
This episode is brought to you by Sarmaya Partners. Learn more about Sarmaya’s LENS ETF, their full data and comparison, including performance here:
Jim Bianco of Bianco Research called the 2022 bond bear market and stayed bearish on bonds for six years. Now, for the first time since then, he’s constructive.
Jim explains why 5% yields aren’t punishing but normal: rates should roughly track nominal GDP growth, and he expects the U.S. economy to grow at 5–6% nominally. He makes the case that inflation is stuck at 3% because the era of cheap Chinese goods is over, and explains why oil is already effectively $200 a barrel once you count tanker costs and naval security in the Strait of Hormuz. He also covers why diesel shows up in the price of everything, and why Kevin Warsh scrapping forward guidance has left markets feeling around in the dark.
On credit, Jim explains why the blowout in CCC bonds, CoreWeave included, is a handful of problem kids in detention rather than a canary in the coal mine. On AI, he argues it’s 1997, not 2000, and that the bigger risk may be that AI works.
Follow Jim on X: @biancoresearch
Bianco Research: biancoadvisors.com
Jack Farley on X https://x.com/JackFarley96
Follow Monetary Matters on:
Apple Podcasts https://rb.gy/s5qfyh
Spotify https://rb.gy/x56dx5
YouTube https://rb.gy/dpwxez
Important Information
The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. This and other important information are contained in the prospectus, which may be obtained by following the links Prospectus and Summary Prospectus or by calling +1.215.330.4476. Please read the prospectus carefully before
investing.
There is no assurance that the fund will achieve its investment objective. The Fund may not be suitable for all investors. Investors should continue to review their investment objectives and risk tolerance periodically.
An investment in the Fund involves risk, including possible loss of principal. Exchange traded funds (ETFs) trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF’s net asset value (NAV), and are not individually redeemable directly with the ETF. Brokerage commissions and ETF expenses will reduce returns. ETFs are subject to specific risks, depending on the nature of the underlying strategy of the Fund, which should be considered carefully when making investment decisions. For a complete description of the Fund’s principal investment risks, please refer to the prospectus at https://sarmayaetf.com/
Metals and Mining Companies Risk. Metals and mining companies can be significantly affected by events relating to internati
More from this podcast
Monetary Matters with Jack Farley →