Bloomberg Talks Charles Schwab Chief Investment Strategist Liz Ann Sonders Talks Fed Decision
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Dec 18, 2024 
Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, shares her expertise on the recent Federal Reserve decisions. She discusses the market's reaction to pauses in interest rate changes amidst inflation and strong economic growth. Sonders delves into the importance of balanced investment strategies in navigating political and economic uncertainties. She analyzes recent market sell-offs, emphasizing corporate earnings as key to a cautiously optimistic outlook for the future. Insights on adapting to fluctuating regulations in investment decisions are also highlighted.
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Market Reaction and Underlying Weakness
- The market's reaction to the Fed's decision was surprising, given the high probability of a pause.
- Underlying market weakness, masked by the "MAG-7" stocks, was revealed by negative market breadth.
Policy Uncertainty and Asset Allocation
- Confusion surrounds both Fed policy and government policy, especially concerning tariffs and immigration.
- These policies impact inflation and growth, making asset allocation decisions difficult.
Asset Allocation Advice
- Stay close to benchmark strategic asset allocation weightings.
- Take advantage of volatility for portfolio rebalancing instead of calendar-based rebalancing.