On Investing

Kevin Gordon, Director and senior investment strategist at Schwab Center for Financial Research, joins the discussion on the Federal Reserve's independence amid political pressure. He highlights the potential risks of increased control over monetary policy and explores how sectors like housing are reacting to interest rate changes. The conversation dives into the state of bond and stock markets, emphasizing the importance of labor market reports and inflation metrics to anticipate economic shifts. Healthcare investments are also explored as emerging opportunities.

Cooper Howard, Director and fixed income strategist at the Schwab Center for Financial Research, dives deep into the muni bond market. He examines why munis have lagged behind other fixed income options this year and highlights the appeal of high-yield municipal bonds. The conversation also explores the benefits of investing in individual bonds versus mutual funds or ETFs. Listeners will gain insights into the dynamics at play in the muni market, offering potential opportunities for savvy investors.

Kathy Jones and Liz Ann Sonders dissect the latest Consumer Price Index data, raising concerns about inflation and the threat of stagflation. They analyze the Federal Reserve’s tricky position on interest rate cuts while navigating a stable labor market. The duo emphasizes the importance of diversification in investments, especially with international assets. They also preview crucial upcoming economic indicators that could shape market trends, alongside a fascinating debate on differing views regarding impending rate cuts within the Fed.

Kevin Gordon, a market strategist, fills in for Liz Ann Sonders and dives into current economic trends with Kathy Jones. They discuss the implications of tariffs on the economy and trade relations, especially concerning Brazil and the UK. The conversation also tackles inflation, labor market dynamics, and the importance of robust companies during instability. Furthermore, they explore the unusual low yields in the corporate bond market, highlighting the need for careful assessment amidst hopeful investor sentiments.

Collin Martin, Director and Fixed Income Strategist at the Schwab Center for Financial Research, shares his insights on the evolving credit markets. He highlights the recent surge in leveraged loan issuance despite rising interest rates, discussing the risks and unique features of these loans. The conversation also covers the allure of Treasury Inflation-Protected Securities (TIPS) as a hedge against inflation. The experts emphasize the need for caution amid mixed signals from the Federal Reserve and economic indicators that could impact future market dynamics.

In this discussion, the experts break down the latest inflation data and its implications for the Federal Reserve's decision-making. They dive into how tariffs affect core goods and analyze rising global yields. The impact of a weaker dollar on the tech industry is examined, alongside the booming job market for AI engineers. Challenges in the housing market are highlighted, particularly issues around affordability and stagnant sales, making it a timely exploration of current economic dynamics.

On this week's episode, Kathy Jones and Liz Ann Sonders discuss the bond market reaction to the new August 1 tariff deadlines—and what that means for potential Fed policy. They also examine the impact of servicing the national debt after the passage of the "One Big Beautiful Bill." Liz Ann looks at the upcoming earnings season, while also addressing concerns about economic indicators, inflation, and the housing market. The overall discussion this week emphasizes the cautious sentiment among bond investors and the complexities of the economic landscape.On Investing is an original podcast from Charles Schwab. For more on the show, visit schwab.com/OnInvesting. If you enjoy the show, please leave a rating or review on Apple Podcasts.Important DisclosuresThe information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve. Investing involves risk, including loss of principal. Performance may be affected by risks associated with non-diversification, including investments in specific countries or sectors. Additional risks may also include, but are not limited to, investments in foreign securities, especially emerging markets, real estate investment trusts (REITs), fixed income, municipal securities including state specific municipal securities, small capitalization securities and commodities. Each individual investor should consider these risks carefully before investing in a particular security or strategy.Currency trading is speculative, volatile and not suitable for all investors.Forecasts contained herein are for illustrative purposes only, may be based upon proprietary research and are developed through analysis of historical public data.The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors.(0725-GHV6)

Mike Townsend, Schwab's managing director of legislative and regulatory affairs with over 30 years of experience in Washington, joins to discuss the current geopolitical climate and its effects on financial markets. They dive into how U.S. involvement in Middle Eastern conflicts influences investor sentiment and market reactions. Townsend highlights the evolving trade policies, potential deregulation, and looming cryptocurrency regulations, while also assessing labor market trends in light of economic indicators.

Cameron Dawson, Chief Investment Officer of NewEdge Wealth, joins the conversation to discuss the complexities of the current economic landscape. They tackle the 'muddiness' in recent data, including the impacts of inflation, tariffs, and corporate margins. The duo emphasizes the importance of international diversification and strategic portfolio construction, especially in uncertain times. With insights into consumer behavior and the bond market, the discussion illuminates the intricate dynamics affecting today's investment strategies.

Kathy Jones and Liz Ann Sonders dive into the complexities of tariffs and their ripple effects on employment and manufacturing. They discuss the difficulties in predicting tariff revenues and how political changes could impact national debt. Key economic indicators like jobs and inflation are scrutinized, revealing a connection between tariffs and consumer behavior. The conversation also highlights the surprising rise in labor costs alongside declining productivity, raising questions about government data accuracy.