A.I. To Cause Even Higher Inflation & Interest Rates? | Jim Bianco

October 20, 2026

AI Summary

5 min read

In October 2024, Meta’s AI agent Muse became the number one downloaded app in days. Within six weeks, the KBW bank stock index fell 15%. Jim Bianco does not think this is a coincidence. He argues that the conventional worry about AI—that it is a bubble that will burst, leaving disappointed investors and defaulted debt—misses the bigger risk. For Bianco, the real question is: what if the technology actually delivers?

The "What If It Works" Scenario

Bianco frames the AI debate around an uncomfortable possibility. Most Wall Street commentary focuses on the downside: CoreWeave defaults, the hyperscalers’ capex proves wasteful, the bubble pops. But Bianco points to the internet as a historical model. The Nasdaq fell 83% between 2000 and 2002, then went up nearly 20x over the following two decades. The technology delivered after the speculative mania cleared. AI, he suggests, could follow a similar path—not in the sense of a crash and recovery, but in the sense that the technology may actually transform the economy in ways that are themselves destabilizing.

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Guests on this episode

Jim Bianco

Show Notes

Market researcher Jim Bianco isn't worried that A.I. will disappoint.He's more worried it will deliver on its promises.Why?Because he think that would usher in an era of higher inflation and higer interest rates.To learn why, watch this interview.

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