The Fed is making a mistake by cutting rates next week: Jim Bianco

Piper Sandler's Michael Kandrowicz joins us here in a moment, but let's start with Jim Bianco. He's president of Bianco Research. Jim, you've got kind of a similar take on this. Rising bond yields, especially in the wake of the jobs report today, tell you what? I think what they tell us is the Fed's making a mistake. I think that the market is worried in the face of what has been a very strong economy and what is the potential of big fiscal stimulus if Donald Trump wins the election. We don't need rate cuts and we're going to get lots of them. And Chicago Fed President Austin Goolsbee said we could get hundreds of basis points of rate cuts between now and the beginning of twenty twenty six, fourteen months. And that's too much. And the bond market, I think, is starting to sniff out that there's an inflation problem. Tips break evens, which is a market based measure of inflation. Expectations have been rising and that we're going to see another rate cut next week. And the market, I think, is worried that this is not necessary. And that's why you're seeing this adverse reaction of rising yields. Just press on this for a second. The market, I mean, stocks, let's just call are more or less at all time highs. So what does that tell you in conjunction with what we're describing? We don't need rate cuts. The stock market went up 17 percent between July twenty three and September twenty four when the funds rate was over 5 percent. It was fine with it. And now that the funds rate has been cut in September, it's gone up even faster. If the stock market's telling us these rates are fine and we don't need rate cuts, but if you're going to give them to me and you're going to give me extra stimulus, we're going to shove stocks even higher. That sounds good. I'm not against that. But the consequences of all of that could be more inflation. All right. Let's bring in Michael Kantor. He's here on set with me as well. He's chief investment strategist at Piper Center. Also, am I correct about this? Now you're the number one portfolio strategist, according to I.I. Thank you. Is that a new thing? Yes. But wow. All right. Nice job. All right. So, Mr. Numero Uno, what do you share Jim's kind of concern? This discussion reminds me a little bit of the Jamie Dimon sugar high comments he's made sometimes about the economy and the markets. I'm just curious what you make of the landscape. Well, I think, you know, I agree with what Jim said, but to argue the market doesn't need more cuts. We don't know that yet because we're still pricing in cuts. So as long as that's the case, even with rates backing up, that's still a helpful backdrop. I think rates have gone up really since the data started getting better around when the Fed actually did their 50 basis point rate cut. You see in the U.S. eco data, particularly employment data, besides today's report, has been significantly better. And the global economic surprise index has gone straight up in the last month or so. So those data track, explain bond yields really well. And the short end of the curve has gone up as well, kind of suggesting that it's not really so much about Trump and his odds of winnings, because if short term rates, six month yields, one year yields are going up, the election doesn't really have an impact on that. The deficit issues aren't immediate. And what the Fed's going to do in the next two meetings is not really a function of who's going to be in office.