In this week's episode, we break down the factors and trends shaping the economy, including new reports that shed some light on labor and inflation. Expected rate cuts from the Federal Reserve at next week’s Federal Open Market Committee Meeting (FOMC) appear to be the main driving force behind movements in fixed income and equities. Please join us on Thursday, September 18, where we’ll sit down with experts in Artificial Intelligence during our National Call: AI: Everything You Are Afraid to Ask but Need to Know. And be sure to tune in again next week, where we’ll recap the news from this highly-anticipated FOMC meeting, and anything else impacting the markets.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

Rajeev Sharma, Head of Fixed Income

Stephen Hoedt, Head of Equities

02:16 – We consider a softening labor market as evidenced by an increase in weekly initial unemployment claims and the semi-annual update from the Bureau of Labor Statistics detailing a correction of over 900,000 fewer jobs in the 12-month period ending in March 2025 than was initially reported.

03:42 – The Producer Price Index (PPI) data showed a slight decline, while the Consumer Price Index (CPI) report indicated higher-than-expected month-over-month and year-over-year inflation, driven mainly by food and shelter costs.

04:48 – The Fed seems poised to resume interest rate cuts with next week’s FOMC meeting, as fears of making a policy error dissipate as rising (but not accelerating) inflation and a cooling jobs market create an opportunistic environment for rate cutting.

06:40 – Treasuries show demand and momentum ahead of the FOMC meeting, with the 2-Year Treasury yield hitting 3.55% and the 10-Year around 4.06%.

11:04 – Equities buck the historical norm of taking a downturn this time of year, buoyed by expectations of rate cuts and record investments in tentpole industries like Artificial Intelligence in an apparently non-recessionary climate.

14:08 – A brief look into what’s happening with resilient crude oil prices and early stimulation in the housing market.

16:11 – We revisit our predictions for 2025 that were made late last year, and gauge how accurate they have been thus far.

Additional Resources

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In this week's episode, we discuss the Beige Book Report, and three employment reports including fresh numbers from a weaker-than-expected report from the Bureau of Labor Statistics (BLS). We also touch on the policies and politics bedeviling the Federal Reserve, and the likelihood of rate cuts later this month. As always, we analyze how all of these factors affect the equity and bond markets. Finally, happy National 401(k) Day! See today’s resources below to help you educate and celebrate.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Managing Director of Fixed Income

Stephen Hoedt, Head of Equities

01:45 – The four reports driving economic activity this week: the Beige Book report, initial unemployment claims, the Jobs Openings and Labor Turnover Survey, and the eagerly-expected BLS Employment Situation report. 

05:21 – The weak BLS report further fuels expectations for a September rate cut, with the odds of bigger or more frequent cuts increasing.

07:28 – A look into the economy’s impact on the stock market, and vice versa, and the k-shaped economy of 401(k) haves and have-nots.

09:19– Treasuries have rallied on the jobs report, with some calling it a “jobs recession.”

11:20 – We discuss the goings-on at the Federal Reserve, including Stephen Miran’s confirmation hearing for Fed Governor and Scott Bessent’s alleged interviews for the next Fed Chair.

14:11 – In the world of equities, cyclicals and small cap stocks are ascending as mega-cap tech stocks had a slower week.

18:45 – Concluding thoughts on the still-present threat of tariffs impacting the economy, and what to do with your portfolio now. 

National 401(k) Day Resources

Retirement Advice

Should I Still Worry About Inflation’s Impact on My Retirement Plan?

The Key 401(k) Pooled Employer Plan

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In this week's episode, we discuss the latest economic and market news, including updates on unemployment claims, GDP growth, and inflation data. Our experts provide their insights and analysis on the implications of these and other economic developments, particularly the potential impact on the Federal Reserve's monetary policy decisions. We also touch on the potential political challenges facing the Fed and questions about its independence and how that could affect the equity and bond markets. 

01:59 – The three reports this week on initial unemployment claims, GDP, and consumer spending, are painting a mixed picture of the economy.

04:49 – Nvidia’s earnings report feels representative of the broader market; equities continued to climb this week, despite a sell off Friday morning and the potential for seasonal plateaus.

06:15 – Turmoil at the Fed having minimal impact on equities, but the bond market appears much more susceptible as the yield curve steepens.

08:29 – We ruminate on the implications for Fed independence, the rate environment, and overall economic and social implications of a change in the composition of the Fed Board of Governors.

10:28 – Parallels may be seen between the current economic climate and the bubble of the late 1990s to mid 2000s.

13:28 – Rate cuts are still likely at September’s Federal Open Market Committee meeting.

14:31 – Some advice on how to approach your portfolio in the midst of an uncertain economic and political climate.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Managing Director of Fixed Income

Stephen Hoedt, Head of Equities

Additional Resources

Attend: AI: Everything You Are Afraid to Ask but Need to Know.

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In this week's episode, our experts review the now-stale minutes from July’s Federal Open Market Committee (FOMC) meeting, Fed Chairman Jerome Powell’s new dovishness from the Jackson Hole Economic Symposium, and what to look out for in the coming weeks as we near the end of a notable summer.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Managing Director of Fixed Income

Stephen Hoedt, Head of Equities
 

02:30 – We highlight this week’s economic releases: the Labor Department reports that weekly unemployment claims rose slightly but remained stable over the past 18 months, and the National Association of Realtors reports that existing home sales rose by 2% in July.

03:43 – The July FOMC minutes were hawkish, and show Committee member concerns over tariff-driven inflation, elevated asset valuations, and that the current fed funds rate may not be far above neutral. The meeting pre-dated the weaker July employment report and subsequent shift in focus from inflation to the cooling jobs market.

04:52 – Federal Reserve Chair Jerome Powell appears to pivot towards a dovish stance and emphasizing the downside risks to the labor market at the Jackson Hole Economic Symposium; expectations of a rate-cutting cycle beginning in September shot up and Treasury yields dropped sharply in response.

07:47 – Political turmoil continues to put pressure on the Federal Reserve on allegations of mortgage fraud against Fed Governor Lisa Cook, who has been pressured to resign or face removal by President Trump. 

12:45 – We discuss the apparent bifurcation in the economy, with weakness in consumer spending offset by strength in business investment, particularly in data centers and artificial intelligence.

16:46 – We anticipate how the market might react to an upcoming earnings report from Nvidia and news that the federal government is considering taking ownership positions in tech stocks.

Additional Resources

Read: Key Questions: How Does Key Wealth Define Quality Within Our Internally Managed Equity Strategies?

Watch: Planning Implications of the One Big Beautiful Bill (OBBB) Act

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This week was lighter on economic news and reporting—certainly when compared to the previous two action-packed weeks—so we’re shaking things up for this episode. Each expert brings to the table a news item that caught his eye this week, and one topic that might not be receiving enough attention. Topics include skyrocketing investment into artificial intelligence, the fractures at the Federal Reserve (see Additional Resources below for a link to past guest Cynthia Honcharenko’s take on the interesting dynamics taking place at the Fed), turmoil in the gold market, the changing demographics of the labor market amid evolving ways and means of working, and more. Wishing a happy International Beer Day and National Pickleball Day to those who celebrate; maybe not at the same time.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Stephen Hoedt, Head of Equities

02:23 – The ISM Services Purchasing Managers’ Index—a measure of the health of the U.S. services sector—dipped to 50.1 in July, down from June’s 50.8. 

02:42 – Initial unemployment claims for the week ending August 2 were up 7,000 claims from the previous week, for a total of 226,000 initial claims.

03:32 – Investment in AI technologies exceeded $150 billion in the first half of the year, which may contribute to the increasing productivity in the workforce as measured by recent average revenue per employee figures.

05:52 – The Fed continues to fracture amid a surprise appointment of a temporary Fed governor to fill a recently-vacated seat. 

07:28 – The ups and downs of Trump’s order to allow private equity investment in 401 (k) retirement plans.

08:40 – China is mentioned less in the news these days, but that doesn’t mean nothing newsworthy is happening there. Portfolio diversification through international markets is a good idea, and there’s some potential in the Chinese markets.

10:17 – A discussion on the turmoil in the gold markets on news of a 39% import tax on some gold coming into the U.S.

13:45 – With an outsized population of retirees on the horizon, and a new generation coming into the workforce with a very different jobs landscape, what’s the future of productivity?

15:02 – Diversification is the sound investment strategy for the day. We’re seeing some softness in the labor market, but most economic indicators are favorable. Still, things can be unpredictable, and a diversified portfolio can shield you from some targeted disruptions. 

Additional Resources

Read: Key Questions: Cracks in the Foundation: Symbolic or Systemic? Fed Unity Frays as Policy Dissonance Grows.

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In this week's episode, we discuss eight reports and news items that are impacting the economy today, and which will likely have lingering effects into the future; these touch on the labor market in regard to unemployment and payrolls, housing, inflation, Gross Domestic Product (GDP), earnings season, and – the big news of the week – what came out of the Federal Open Market Committee (FOMC) meeting and the lower than expected new non-farm payroll report. As always, we analyze these items and how they’re affecting the equity and bond markets, and what moves investors may consider making.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy
George Mateyo, Chief Investment Officer
Stephen Hoedt, Head of Equities

Rajeev Sharma, Managing Director of Fixed Income

Cynthia Honcharenko, Director of Fixed Income Portfolio Management

01:47 – We introduce the eight topics and reports that lay the groundwork for our discussion: weekly initial unemployment claims, job openings, existing home sales, GDP for Q2:2025, the Personal Consumption Expenditures (PCE) inflation figures, the jobs report showing underwhelming numbers for new nonfarm payrolls, a negative revision for the May and June figures, and a slight bump in overall unemployment, the FOMC meeting, and news from the midst of earning season.

06:30 – The big items from the FOMC: rates remain unchanged, two governors voice dissent, and no firm commitment on a September rate cut. The reasoning behind the continued fed funds rate is that inflation is still elevated, the labor market is robust, unemployment remains low, and inflationary pressures persist due to trade uncertainties.

07:42 – Fed Chair Jerome Powell touched on 7 themes during the post-meeting press conference: no rate cuts, monetary policy is restrictive, pressure from tariffs, conflicting pressures between inflation and the labor market, market pricing recalibration, Fed independence in rate setting in light of government borrowing costs, and acknowledging the notable dual dissents within the FOMC meeting.

09:35 – The likelihood of a September rate cut dropped to 39% at the time of the FOMC meeting, with a fourth quarter cut more likely. The dissent from governors Christopher Waller and Michelle Bowman seems less politically motivated than borne out of genuine care for the labor market.

12:38 – The labor market is stable but might be starting to show some cracks signaling a potential slowdown as layoffs are low but so is hiring.

17:01 – The 2-year Treasury yield, which is most sensitive to Fed policy, rose slightly following the FOMC meeting on Wednesday, then dropped significantly today in reaction to this morning’s jobs report – the biggest such reaction since 2004. Given this volatility, expectations of a September rate cut are now increasing.

20:07 – Shifting tariffs and trade policy seem to be hitting the stock market this week, with falling copper futures as a notable example. 

21:16 – The Trump administration’s recent pushback against Powell’s wait-and-see approach to rate cuts appears prescient given the market reaction to today’s lukewarm jobs report. There’s now a higher chance of a Powell resignation as a Fed governor rather than finishing out his full term, after a potential replacement as the sitting Fed Chair.

24:14 – As earnings season continues, major tech companies are showing mixed results, with Microsoft and Meta reporting favorably in contrast to lackluster reports from Amazon and Apple.

Additional Resources

Read: What Are the Top 10 Provisions in the “One Big Beautiful Bill Act” That Will Impact Businesses?

Attend: August 19: Key Wealth's National Call: Planning Implications of the One Big Beautiful Bill (OBBB) Act

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In this week's episode, we review the unemployment and home sales figures that were released this week, as well as the ongoing trade tensions and tariff negotiations between the United States and its trading partners. We also touch on the Federal Reserve’s policy decisions and President Trump’s visit to tour the renovations to the Federal Reserve headquarters in Washington, D.C. Lastly, we look into the performance of the stock market, including the S&P 500 reaching new all-time highs, a new round of corporate earnings, and the resurgence of "meme stocks."

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer
Stephen Hoedt, Head of Equities

01:47 – The initial unemployment claims report showed a decline, indicating a robust employment market. However, existing home sales fell due to higher mortgage rates.

02:35 – The European Central Bank paused its rate-cutting cycle, which could be an indirect factor in the upcoming Federal Reserve policy decision. President Trump also visited the Federal Reserve and spoke with Chair Jerome Powell.

03:52 – Regarding tariffs, the U.S. reached a tentative agreement with Japan to lower tariff rates, which was seen as positive news. However, the overall tariff rate remains elevated compared to the beginning of the year.

07:58 – A discussion on the resilience of the economy, with corporate earnings exceeding expectations and the labor market remaining healthy. They also noted some potential headwinds, such as policy uncertainty and the potential for market volatility as we head into autumn.

Additional Resources

Key Questions: What Are the Top 10 Provisions in the 'One Big Beautiful Bill Act' that Will Impact Individuals?

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In this week's episode, we cover a wide range of reports that touch on inflation, consumer spending, manufacturing activity, and what might come out of the upcoming Federal Open Market Committee (FOMC) meeting on July 30. We also analyze the moves in both the bond markets and equities caused by the rumors of President Trump’s desire to remove Federal Reserve Chairman Jerome Powell. Lastly, we discuss the potential for antitrust activity among the most influential companies in the technology sector, colloquially known as the Magnificent 7.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer
Rajeev Sharma, Managing Director of Fixed Income
Stephen Hoedt, Head of Equities
 

00:57 – The Consumer Price Index – a measure of inflation – increased in both overall and core (which excludes food and energy prices) figures in June, both month over month and year over year. The next release of the Personal Consumption Expenditures Index (PCE) – another measure of inflation – is expected on July 31.

02:03 – The U.S. Census Bureau released its monthly report on advance monthly retail sales, which was positive for the economy and showed an 0.6% increase in consumer spending for June.

02:46 – The Federal Reserve’s latest Industrial Production and Capacity Utilization report showed a 0.3% uptick in manufacturing in June, which was a very welcome sign because April and May figures were relatively flat, and March was negative.

03:27 – The Fed released its Beige Book report, which comes out in advance of the upcoming FOMC meeting. Overall, it shows cautiously positive signs across the twelve districts, with five reporting slight or modest gains, five with flat activity, and modest declines for the remaining two.

04:12 – We note three themes to pay attention to over the next few weeks in addition to the upcoming FOMC meeting: President Trump’s ongoing or extended pause on tariffs, the PCE inflation report, and updated figures on the labor market.

05:08 – Because the CPI data was higher than expected, market expectations of the Fed issuing a July rate cut are down to under 5%, while expectations of a September rate cut are around 60%. Still, a growing contingency is betting on the next rates cuts coming as late as the fourth quarter of this year or not at all until 2026.

06:27 – The bond market reacts to this week’s economic news with front-end yields, which are more sensitive to Fed policy, moving lower more rapidly than longer-ended yields, which are more sensitive to the economy and inflation.

07:56 – The Merrill Lynch Option Volatility Estimate (“the MOVE Index”,) – which tracks volatility in the bond market – spiked on reports that Trump was thinking of removing Fed Chair Jerome Powell, but quickly came back down and remains stable, signaling a resilient bond market.

09:56 – An overall analysis of the economy and markets considering this week’s rumors of Powell’s potential ouster, the more likely potential of his serving out his full term, and conversations of who might come next. We look to historical precedent during Richard Nixon’s presidency for what might happen in the future.

13:29 – The equities market continues to see all-time highs and will likely remain high in August before anticipated cooling beginning in September. Technology sector stocks lead the market rally, with some lagging in healthcare and consumer staples.

17:36 – Stocks of the Magnificent 7 are buoying the markets partly because of their high trading volume and concentration. More singularly focused companies like Microsoft and NVIDIA seem immune from government interference, but more-diversified companies like Meta and Alphabet might be more susceptible to anti-trust efforts.

20:19 – The overall economic outlook is positive for now. Recession fears and tariff-related volatility are coming down, but can come back at any moment. The implications for your portfolio are to balance risk and remain diversified to offset potential future fluctuations.

Additional Resources

Key Questions: What Is in the One Big Beautiful Bill Act and How Does It Compare to Current Law?

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In this week's episode, our experts discuss the state of the economy, markets, and investment outlook for the second half of 2025. 

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer
Rajeev Sharma, Managing Director of Fixed Income
Stephen Hoedt, Head of Equities

01:36 - Recap of employment data which shows stability with positive revisions and declining unemployment claims. 

03:54 - Discussion about renewed tariff threats (up to 200%) and their potential to slow growth and raise inflation. The team highlights the impact of the “One Big Beautiful Bill” on deficits and long-term interest rates.

08:48 - Reflection on a volatile first half of 2025 and anticipates modest gains through August. Forecast of potential market “indigestion” in September–October due to valuation concerns

14:33 - Prediction of two rate cuts in 2025, likely starting in September. The team emphasizes uncertainty around tariffs and inflation, and recommends high-quality corporate bonds over Treasuries.

Additional Resources

Key Questions: What Is in the One Big Beautiful Bill Act and How Does It Compare to Current Law? | Key Private Bank

Books and Podcasts for Your 2025 Summer Reading and Listening

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In this episode, our experts opine on the economy, considering three key indicators making a splash this week: unemployment claims are down, but so was the first quarter estimate of Gross Domestic Product (GDP), while inflation stayed stickier than hoped for in May. Meanwhile, bond yields moved higher, and the stock market is having a heyday, despite the dollar hitting a three-year low. We will be off next week for the July 4th holiday, and look forward to bringing you fresh insights the following week.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer
Rajeev Sharma, Managing Director of Fixed Income
Stephen Hoedt, Head of Equities
 

02:16 – Initial unemployment claims for the week ending June 21 came in at 236,000 – 10,000 lower than the prior week – which was a welcome sign given this figure’s recent upward trajectory.

02:43 – The final Gross Domestic Product (GDP) estimate for the first quarter of 2025 showed a 0.5% contraction, caused by an increase in imports ahead of President Trump’s insistence on widespread tariffs.

03:37 – Inflation – excluding food and energy – remained sticky in May, as the core personal consumption expenditures price index (PCE) ticked up to 0.2% month-over-month, and 2.7% year-over-year.

05:01 – Following a run of resiliency, key economic indicators appear to be following suit with the negative sentiment that has been pervasive in the first half of 2025.

09:47 – Fed Funds futures are pricing in a modest 20% chance of a rate cut in July, but expectations of the first rate cut in September appear more solid at 90% odds.

10:22 – Bond yields moved higher in reaction to the PCE inflation data, while the U.S. dollar dipped to its lowest level in three years.

11:58 – Investment grade credit spreads remain unchanged for the week and continue to trade at a very tight range.

13:39 – The stock market is enjoying all-time highs that will likely continue into next month, furthering the trend of July being the best-performing month of the year, based on historical data.

17:56 – The 90-day pause on tariffs announced in April is set to expire on July 9, though recent news suggests this is more of a soft target than a hard deadline. 

Additional Resources

What Happens If the TCJA Expires? Why It Matters Now for Your Taxes and Your Legacy

Books and Podcasts for Your 2025 Summer Reading and Listening

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