Money Life with Chuck Jaffe

Economist Daniel Altman — who publishes the Daniel Altman's High Yield Economics newsletter — says that the Federal Reserve and its chairman Jerome Powell provided more certainty than the market was expecting on Wednesday by effectively confirming that fighting inflation, rather than unemployment, is Job One. That means interest rates will stay higher for longer, with cuts not occurring until late this year or into 2026. Altman worries about the potential for stagflation and says that the job market may be weaker than the numbers are suggesting, but he does believe the worst-case outcomes can be avoided with appropriate policy decisions. Charlie Ripley, senior investment strategist at Allianz Investment Management, says that the soft economic data like consumer confidence suggests that the economy is headed into a big slowdown, but the hard data isn't validating the biggest worries yet. Ripley says fundamentals remain strong, and that there are some plusses — like falling energy prices — that have been overlooked amid the dire headlines. Todd Rosenbluth, head of research at VettaFi, makes a brand new fund that is focused on hedge-fund activity his "ETF of the Week," noting the fund's potential for diversifying the average portfolio and for running against market trends.

Economist Steven Durlauf, director of the Stone Center for Research on Wealth Inequality and Mobility at the Harris School of Public Policy Studies at the University of Chicago, says that the federal budget deficit is the biggest source of the country's trade deficit, meaning politicians have failed "to seriously address the relationship between what the government wishes to do and how much it costs." If politicians can't cut budget deficits and, potentially, raise taxes, Durlauf says, tariffs won't fix the problem, and will cause new troubles. Durlauf sees the tariffs creating a one-time price hike of 2 to 3 percent, he expects unemployment to rise by about 1 percent, and he expects stagflation while the government sorts out tariffs and ultimately settles on lower levels than have been in current headlines. Howard Dvorkin, chairman at Debt.com, talks about how consumers who were already acting stretched are likely to respond to feeling the pinch of tariff-induced price hikes, and whether that will be the thing that gets consumers to stop spending. He has advice on what consumers should do to avoid getting caught in a debt spiral in this environment, and how the market is likely to respond to rate cuts when they happen later this year. Plus, Chuck answers a question from a listener who is facing expenses that require him to sell some securities to raise cash, and he wants to know how to decide the pecking order on which assets get the axe and where in his asset allocation they come from.

Jeffrey Roach, chief economist at LPL Financial, says that while the economy is starting to point towards likely outcomes — an economic slowdown that leads to stagflation but likely stops short of recession — the extremes are still possible. That means the outcomes run from a potential trade war to a no-landing scenario until at least 2026. Roach discusses the challenges faced by international economies and markets right now, as well as whether stagflation or recession is worse for consumers. Greg McBride, chief financial analyst at BankRate.com, discusses what he expects to hear from the Federal Reserve later this week, but also notes that investors who are scared of the current markets can find safe havens in banking products, once again creating CD ladders that can deliver above-inflation returns while also dealing with rate cuts likely to arrive later this year. Plus Robert Farrington, founder of The College Investor, discusses the end of student-loan relief that has been in place for the last five years, with more than 40 million Americans now facing consequences if they can't repay student loan debt. He talks about what borrowers can do to ease the burden and reduce its impact on their finances.

Odeta Kushi, deputy chief economist at First American Financial Corp., says she expects the housing market to remain sluggish for as mortgage rates remain above 6 percent; while she expects the Federal Reserve to cut rates during the second half of the year, she's not expecting conditions to change much. That said, she noted that First American's Housing Recession Indicator — based on the trends of eight economic variables — is not flashing red, largely because new home sales have remained strong enough to overcome the other headwinds that home builders are facing. David Trainer, founder and president, New Constructs, puts electric-vehicle maker Rivian back in the Danger Zone; the stock first appeared there as an IPO and is way down since, but Trainer questions whether there is any way to hit the brakes on what he sees as a slide that ends near zero. Lester Jones, chief economist for the National Beer Wholesalers Association, discusses the latest Beer Purchasers' Index, which is an economic buzzkill as it shows continued contraction as buyers are increasingly pessimistic about prospects for the summer and fall. Plus Chuck responds to two listeners concerned with the show's balance and — by revisiting one of last week's guests — provides a reminder that politics and portfolio strategies don't mix well.

Craig Johnson, chief market technician at Piper Sandler, says that for all of the tumult and headlines, he still believes the market shows signs that it will still reach 6600 on the Standard & Poor's 500, the level he was expecting at the start of the year. That's up by more than 15 percent from current levels. Johnson acknowledges that the voyage will remain more "noisy" than he expected, but he says conditions "are more normal than many people realize." As a result, he's almost fully invested, counting on making money by climbing the proverbial Wall of Worry. Danielle Poli, portfolio manager at Oaktree Capital Management, says the credit market is delivering returns that are close to the historic levels of equities, but says the current set-up is reminiscent of times in the early 2000s when credit "smoked" equities. With high-yield bonds earning around 8 percent and private credit showing significant demand, Poli says that while credit can be "a great place to hide out," investors can expect even more from it now. Poli says that credit can be more than just "a great place to hide out;" in talking with corporate executives, Poli says she now expects a slower economic environment, with the potential for higher inflation from tariffs, creating the kind of environment where "you're going to want to be in credit over equities." Plus Charles Rotblut, editor of AAII Journal, says the group's latest survey of investor sentiment is showing numbers "that you'd expect to see if there's a bad bull market," with uncertainty being priced into the market and into investor expectations. He also discusses an AAII Journal article highlighting the changing ways that investors are using cash in their portfolios.

Joseph Brusuelas, chief economist at RSM, returns to Money Life today as the firm introduces the RSM US Recession Monitor — a comprehensive scorecard relying on more than 20 indicators to track the health of the economy — which is showing a 55 percent chance of recession, a danger level that Brusuelas says will go higher if current tariff and trade policies continue as announced. While he is optimistic about potential rollbacks in those policies, Brusuelas says the current conditions would be considered recessionary regardless of the party in power in Washington, but are exacerbated more by policy than they have been during times of recession triggers like an oil price shock.Todd Rosenbluth, head of research at VettaFi, brings a Pimco actively managed multi-sector bond fund back as the ETF of the Week, noting that the fund is a strong diversifier and can goose yields now, at a time when investors are looking for safe havens but might want bond managers to manage into the rapidly changing market conditions. Plus, more from the archives with investment legend Jack Bogle — who founded Vanguard 50 years ago today and who appeared on the show a decade ago talking about the firm's 40th anniversary; today's excerpts, culled from three different appearances on the show, include comments from 2016 on the first Trump Administration that stand up particularly well against the test of time.

Money Life celebrates it's 13th anniversary by looking at the past, the present and the eternal, digging into the archives for excerpts from a 2018 conversation with Jack Bogle that remains completely relevant — and perhaps moreso — despite the passage of time. Bogle — the founder of The Vanguard Group — who popularized index investing and was routinely called "Saint Jack" in the investing world, talks about how he invested and built his personal portfolio, saying that he favored the simple and domestic over the complicated and worldwide, but also talks about the evolution of ETFs, changes to the way people perceive indexing and more. With the show now in its 13th year, Chuck also gives a little 'bar mitzvah speech,' discussing the lessons he says are most important and prevalent from 13 years, over 3,250 shows and more than 10,000 interviews. Plus Nancy Prial, co-chief executive office and senior portfolio manager at Essex Investment Management talks small-cap investing in the Market Call.

Steve Rick, chief economist at TruStage, says that he has lowered his forecast for economic growth to 0.5 percent, while raising his forecast for inflation to 3.5 percent; that combination means stagflation, and it's starting to happen now and could turn into recession if the growth slowdown is worse than expected. Rick notes that "No one wins trade wars" and notes that if the current situation plays out into one, that trade problems triggering huge downturns would seem to be a classic 100-year event. While he says the damage can be averted if economic policy changes are softened or mitigated, Rick says he worries that the impacts of current events could last as long or longer than the economic impacts of Covid. Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, discusses the unprecedented action in the Dow Jones Industrial Average on April 17, when United Healthcare dropped 22 percent and, by itself, caused a big drop in the benchmark. He analyzes what that means for the Dow as a benchmark, but also talks index construction — and how investors should consider benchmarks — in light of the rapid growth of the Mag 7 stocks relative to the rest of the market. Plus Chuck answers a listener's question about how to sell some gold coins they received as an inheritance.

Everett Millman, precious metals specialist at Gainesville Coins, says that while gold took a big stumble last week, he doesn't believe the strong rally to start the year is over. Further, with gold trading near record highs but oil trading in the range of $70 a barrel, he believes investors will find greater opportunity in gold-mining stocks than in physical gold itself. Coupled with demand behind heightened heightened because gold is historically an asset for uncertain times, and Millman said that while he thinks there may be more volatility moving forward, gold will continue to trend higher. David Trainer, founder/president at New Constructs. puts PPE maker Lakeland Industries in the Danger Zone, noting that these times are much different from when the stock was flying high during the pandemic. Ryan Butler, senior editor at Covers.com, talks about the early impact that tariffs have had on the gaming industry and what he's watching for as trade policies play out, plus Chuck looks at the first 100 days of Trump Administration 2.0 and discusses how the numbers have played out on everything from inflation and consumer prices to the personal savings rate, home and auto sales, mortgage and car loans and more.

Victoria Fernandez, chief market strategist at Crossmark Global Investments, says investors looking at current market turmoil and the potential for stagflation and an economic recession should remember that "Doing nothing is something," making an active decision to continue with current allocations, which she says is appropriate for anyone who felt balanced when they entered 2025. Fernandez expects current tariff policies to drive inflation above the 4 percent level before it cools, creating a stagflationary environment, bringing some hard times that she thinks won't last long once the economy and the market have some long-term clarity and stability on policy changes. because the economy was so strong entering the year. Bryce Doty, senior portfolio manager at Sit Investment Associates, discusses the trading opportunities in closed-end funds created by the market's volatility, but he also notes that in spite of the tumult, his prediction for fixed-income closed-end fund returns this year "is still double digits, it's just going to be different." Plus Burns McKinney, senior portfolio manager at NFJ Investment Group brings his "modern value" investing approach to the Market Call.