The Fed Is Making A Big Mistake - Get Ready For More Inflation | Jim Bianco

**Adam Taggart** (0:00)
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**Jim Bianco** (0:45)
And the mistake is the Fed is cutting rates. They've cut 75 basis points in 2025 to add in to the 100 basis points that they cut in 2024 And they keep citing the labor market. Are they completely misreading this? And yes, the labor market is weak, but the other half labor supply, we don't need that many jobs, and we're doing fine. And that will dictate all of 26 If we've overdone it, we risk too much inflation. Right now, I'm kind of in the they might have overdone it category. They know, they understand the labor supply story. Paul has said this at his press conferences. They're afraid to admit it.

**Adam Taggart** (1:32)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Some analysts fear that the coming year could be pretty gruesome. As a slowing economy gets compounded by rising unemployment, right as tapped out consumers buckle under the high cost of living and rising debt delinquencies. The administration, however, projects a much more confident outlook, when a booming economic growth contained inflation, lower taxes, more jobs, and meaningful government cost containment. So, which future is more likely? To discuss, we've got the good fortune today to welcome back to the program Jim Bianco, President and Macro Strategist at Bianco Research. Jim, thanks so much for joining us today.

**Jim Bianco** (2:13)
Hey, thanks for having me, Adam. I'm looking forward to the conversation.

**Adam Taggart** (2:16)
Thanks, me too. And such a pleasure, A, to talk to you as always, Jim, but a real privilege that you agreed to take some of your holiday time and talk to this audience. So, thank you for doing that. I hope you had a great Christmas and have been having a great holiday with your family.

**Jim Bianco** (2:32)
Yes, I have really been enjoying ourselves. We're in Scottsdale for the month of December. We'll be here through mid-January and I'm struggling with 78 to 80 degrees every day.

**Adam Taggart** (2:42)
Okay. Yeah, that sounds like a real struggle. Having moved from California now to Nevada, I am surrounded by snow and it is very pretty, but it is also very cold. And so I hope you jump in the pool so I can enjoy that vicariously through you later today.

**Jim Bianco** (2:59)
I will.

**Adam Taggart** (3:01)
Okay. Well, look, lots to talk about. And as usual, I made the mistake of asking my Twitter followers if they had any questions for you, and I got way more than we can address in the time we have allotted here, but I'll try to squeeze in as much as I can, folks. But having you here, Jim, the obvious opportunity is to pick your brain for what you see with your head. Now that 2025 is drawing to a close and we're about to start a new year, I mentioned there in the intro, it's kind of a tale of two years ahead right now, depending upon whom you talk to. For you, what do you see as some of the key themes of 2026? What are you looking at most closely as we turn the corner here into the new year?

**Jim Bianco** (3:47)
I think the big economic push from the administration is not tariffs. Everybody talks about tariffs, but I'm going to go a little different direction, and I'm going to talk about immigration.
Right now, if you believe the administration's data, they say 2.5 million people have been deported. They then also say that the number of people coming into the country in the last six months has been zero. Right.

**Adam Taggart** (4:17)
Illegally, yeah.

**Jim Bianco** (4:18)
Yeah. Illegal immigration has been zero. If those numbers are true, now they don't provide any backup. They don't show their homework on it, but they just put those out in press releases through Homeland Security. If those numbers start to be believed, then the population of the US will have contracted by about four-tenths of a percent. That will be the biggest population contraction in the 250 years of this country. In fact, only one other year in American history as the population contracted, that was 1918 during the Spanish Flu. Got very close to doing it during COVID, but it didn't quite do it because we still had high immigration during COVID. Now, why do I bring that up? Because when we look at, you mentioned about rising unemployment, slowing labor. The question is, how many jobs does the US need to create? And the assumption here is, well, it's always 100,000 jobs or 150,000 jobs. Trump has said that he wants to see us churning out 100,000 to 200,000 jobs.