Monetary Matters with Jack Farley · Oct 18, 2026 · 1h 16m · 67m saved
With Jim Bianco, President of Bianco Research
Photo: Dzzyd, CC BY-SA 3.0 via Wikipedia
Every Treasury yield from the 3-year to the 30-year started October 2026 above 5%, and Jim Bianco, president of Bianco Research, told Jack Farley on Monetary Matters that this is when he finally turned bullish on bonds.
The consensus called bonds attractive through 2023, 2024 and 2025, and Jim stayed bearish the whole time. He still does not think bonds are cheap. His case is that 5% yields are normal, and that the zero rates of the 2010s were the mistake.
"I'm not arguing that bonds are cheap. I am arguing that they are no longer expensive." — Jim Bianco
Jim called the 2022 bond bear market before it happened. Besides Bianco Research, he runs the WTBN bond ETF.
The full interview is covered here so you can skip it. 1 hour 16 minutes of audio, 9 minutes of reading.
Here are the 7 calls that matter.
Key Takeaways
Jim turned constructive on Treasurys once every maturity from the 3-year to the 30-year yielded at least 5%
10-year yields would need to reach 14–15% within 5–7 years for bonds to lose money over the next decade
Goods deflation from China is not coming back, which keeps overall inflation from falling below about 3%
Oil already costs about $200 a barrel once shipping and the US Navy's protection are counted
Zero rates, not today's 5%, were the anomaly, and holding rates too low keeps zombie companies alive
Fair value for fed funds is about 4.5%, three more hikes, which Jim expects to test Trump's patience with Warsh
Jim would be a seller of CoreWeave's bonds, and worries more about AI working than about AI failing
1. No Longer Expensive
Jim turned constructive on Treasurys in the first half of October. His yardstick for fair yields is nominal GDP growth, which he puts at 5% to 6%: about 3% inflation that will not come down, plus 2% real growth.
Jim Bianco says bonds have moved from overpriced to fairly priced
"I'm not arguing that bonds are cheap. I am arguing that they are no longer expensive." — Jim Bianco
Once yields reached that range across the curve, he judged the balance of risk and reward had turned in favor of owning longer-dated bonds.
Jim Bianco waited until every maturity from 3 to 30 years yielded at least 5%
"By the beginning of the month... every yield between the three-year and the 30-year was yielding with a five handle on it... Only took us six years." — Jim Bianco
He was explicit that buying bonds now is not a call for a recession.
