Jim Bianco Says Bond Investors Need a Rate Hike as 30-Year Treasury Yield Hits 5.15%: 'When the Fed Start

With 30-year U.S.

Treasury yields at 5.15% and market probabilities of a July 29 interest rate hike climbing to roughly 36%, macro researcher Jim Bianco argues that bond investors need the Federal Reserve to tighten policy to restore calm.

Deconstructing the turbulence, Bianco invoked a Wall Street adage, stating, "When the Fed starts panicking, I can stop panicking".

The Case for a Rate Hike According to Bianco Research, the upcoming Federal Open Market Committee meeting is "definitely in play." Futures markets have priced in a 36% chance of a quarter-point hike to the 3.5%-3.75% range, up sharply from 10% a week ago, largely driven by the sharp rise in Treasury yields and sticky inflation data.

Bianco suggests that if the Fed takes inflation seriously and "panics a little" by hiking rates next week, bond investors will calm down.