Analysis of Jim Bianco's November 2025 CPI Commentary and Market Implications

On December 18, 2025, Jim Bianco of Bianco Research appeared on CNBC’s “Fast Money” to discuss the November U.S. CPI report, stating it “didn’t satisfy us” [1]. The BLS reported a 2.7% year-over-year (YoY) increase in headline CPI, 0.4 percentage points below the Reuters consensus forecast of 3.1% [2]. Core CPI (excluding food and energy) rose 2.6% YoY, down from 3.0% in September [2]. However, the report was severely impacted by a 43-day U.S. government shutdown: no month-over-month changes were included, and some survey data was carried forward from September [3]. Despite the better-than-expected headline figures, U.S. equity markets closed slightly lower: S&P 500 (-0.05%), NASDAQ Composite (-0.02%), and Dow Jones Industrial Average (-0.31%) [0]. This stagnant reaction reflected investor skepticism about the report’s reliability due to data gaps [3]. Bianco also addressed the Bank of Japan (BOJ) rate hike, which occurred the following day (December 19, 2025), when the BOJ raised its key policy rate to 0.75% (a 30-year high) to tame persistent inflation and support the yen [4][5]. His dissatisfaction likely stems from multiple factors: concerns about data reliability, slower progress toward the Fed’s 2% inflation target, sticky underlying inflationary pressures (e.g., housing, wages), and the potential impact of the BOJ hike on U.S. markets (reduced Japanese demand for U.S. Treasuries, rising yields) [1].

1. Data Reliability Overrides Headline Figures
   : The shutdown-impacted CPI report demonstrated that data quality concerns can outweigh better-than-expected economic metrics in market reactions. Investors avoided a positive response due to uncertainties about the report’s accuracy [3][0].
2. Global Monetary Policy Spillover
   : The BOJ rate hike introduces significant global market uncertainty. Japanese investors hold substantial U.S. assets, so any shift in capital flows could increase U.S. yields and impact equity valuations [4][5].
3. Holistic Market Evaluation
   : Bianco’s commentary highlights that market participants consider not only headline inflation data but also underlying factors (data quality, long-term trends, global events) when assessing economic conditions [1].

• Data Distortion
  : The CPI report’s limitations may provide a misleading view of inflation trends, potentially leading to misinformed market decisions. Clearer data from future reports is needed to confirm inflation trajectories [3].
• U.S. Yield Pressure
  : The BOJ rate hike narrows Japan-U.S. interest rate differentials, which could reduce Japanese demand for U.S. Treasuries and push yields higher, weighing on equity markets [4][5].
• Fed Policy Uncertainty
  : If inflation remains stubborn or data uncertainty persists, the Fed may delay expected rate cuts, dampening market sentiment [0].

• Improved Data Clarity
  : As the government shutdown concludes, subsequent CPI reports will provide more reliable inflation data, potentially resolving market uncertainty [3].
• Global Policy Normalization
  : The BOJ’s rate hike may signal a broader normalization of global monetary policy, which could bring long-term stability if communicated effectively [4][5].

• November 2025 CPI: 2.7% YoY (below 3.1% expected), core 2.6% YoY, but limited by government shutdown-related data gaps [2][3].
• Market Reaction: U.S. equities closed slightly lower due to concerns about the CPI report’s reliability [0].
• BOJ Rate Hike: December 19, 2025, to 0.75% to tame inflation and support the yen; may impact U.S. asset demand [4][5].
• Bianco’s Core Concerns: Likely include data reliability, slower progress toward the 2% inflation target, and the BOJ hike’s impact on U.S. markets [1].