In this week's episode, our experts unpack the past few days following positive news on tariff discussions between the United States and China. We also provide observations on the final earnings calls of the first quarter of 2025, changes in consumer sentiment, ongoing uncertainty around the Federal Reserve, what happened in the Treasury Bond market, and how proposed tax and spending plans from Congress will impact the federal deficit. Please note that we will not release a new episode next week in observance of the Memorial Day holiday weekend; we encourage you to take a moment to reflect on the history and meaning of the holiday as we begin the summer season.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

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

00:21 – A reflection on Memorial Day.

03:05 – A review of this week’s Consumer Price Index measure of inflation.

03:56 – The Consumer Price Index report showed month-over-month retail sales rose by 0.1% in April, while industrial production remained flat at a 0.0% change from March.

05:18 – Equity markets rose on news of a coordinated effort between the U.S. and China to rein in tariffs.

11:09 – A look into corporate news of the week in relation to mergers and acquisitions, earnings calls, and a surge in corporate debt issuance.

12:52 – The 10-year Treasury note yield rose to above 4.5% before coming back down towards the end of the week.

15:51 – Priorities seem to shift for Fed Chair Jerome Powell towards addressing employment shortfalls, while still maintaining an inflation target of 2%.

16:52 – A discussion about the potential impacts on the federal deficit and general investment strategy of the proposed tax reforms making their way through Congress.

Additional Resources

Key Questions | Key Private Bank
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In this week's episode, we review the news from Wednesday’s Federal Open Market Committee (FOMC) meeting, highlighting four themes: a slower path to rate cuts; rising risk of policy dilemma and potential stagflation; decisions will be made based on data, not any pre-committed timelines; a policy bias towards easing but with less conviction. Overall economic indicators remain stable, setting us up for a peaceful weekend to celebrate the mothers in our lives this Mother’s Day.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

Cynthia Honcharenko, Director of Fixed Income Portfolio Management

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

01:57 – Weekly initial unemployment claims ending May 3 came in at 228,000, leveling out last week’s larger than average increase, signaling that unemployment remains stable.

02:25 – The Institute for Supply Management (ISM) Services Report showed a tenth consecutive month of expansion in April, and effectively for the past five years. This further contrasts with the weak manufacturing economy.

03:17 – News from Wednesday’s Federal Open Market Committee, during which the Fed maintained its current target rate of 4.25% to 4.50%, citing ongoing economic uncertainties especially from recent trade policies. We explore four key themes to level set future expectations.

10:18 – Due to the Fed’s cautious wait-and-see approach, and given the Trump administration’s 90-day pause on tariffs, the Fed will likely not make any significant decisions prior to its July 30 meeting.

11:04 – A potential trade deal between the United States and the United Kingdom may inform what we can expect on overall trade policy going forward. 

13:19 – Both the S&P 500 and NASDAQ-100 are hovering around or above their respective 200-day averages, signaling continuing improvement after the Liberation Day fallout.

16:40 – News from Apple and Google appear to validate the idea that Artificial Intelligence is disrupting industry writ large, and a future with a new list of “Magnificent Seven” stocks may come sooner than later.

Additional Resources

Key Questions: Is Jay Powell’s Job at Risk, and What Are the Risks for Investors? | Key Private Bank

Key Questions | Key Private Bank
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In this week's episode, our investment experts explore three major themes from the week: negative real gross domestic product (GDP) growth, inflation, and the labor market. We discuss how these factors affect equity and bond markets, and overall sentiment regarding the economy. We also consider if the relatively positive news from this week continues into the weeks and months ahead, or if the full negative impact of tariffs will make for a sobering summer.

01:51 – The advance estimate for the first quarter of 2025 real gross domestic product showed a 0.3% decrease, signaling the first negative quarter since early 2022.

03:02 – The Bureau of Economic Analysis released favorable data on PCE inflation, which was relatively flat month-over-month, and showed year-over-year growth of 2.3%, which was lower than both January and February.

03:57 – The labor market has a cautiously optimistic outlook based on this week’s Job Openings and Labor Turnover Survey (JOLTS) report, weekly unemployment claims, and better-than-expected growth in new nonfarm payrolls, which gave the markets a bump this morning.

09:13 – Expectations of an early rate cut in June from the Federal Reserve are falling as a result of the positive jobs report. Bond investors feel that future employment reports will be less optimistic, and are thus buying on the dip.

11:36 – Changing tax policy will likely be making news soon, especially on the question of tax-exempt status for universities, though existing bonds are unlikely to be affected.

14:09 – Equity markets hit a 20-day high following a handful of better-than-expected earnings reports this week, mostly from the technology sector. 

15:34 – Volatility continues to decline from recent highs, and credit markets appear healthy as evidenced by tightening BBB versus BB credit spreads.

 
Additional Resources
Key Questions: What Is the Mar-a-Lago Accord and Why Should Investors Care? | Key Private Bank

Key Questions: Do Cracks in the Credit Markets Mean US Corporates’ Financial Health Has Cracked? | Key Private Bank

Key Questions | Key Private Bank
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In this week's Market Minutes recap, hear from our team of investment experts as they share their perspectives on the latest market and economic activity. Our panel delves into the ongoing volatility from President Trump’s on-again/off-again tariffs, the public tensions between Trump and Federal Reserve Chair Jerome Powell and the question of a Fed free of political influence, and what happened with earnings in the first quarter of 2025. 

01:52 – Both new unemployment claims and continuing unemployment claims remained stable, despite recent and ongoing market volatility. 

02:20 – Existing home sales fell in March by 5.9%, the biggest month-over-month decline since November 2022.   

02:57 – The Federal Reserve's Beige Book report came out on Wednesday, showing that economic activity changed very little since the previous report. 

03:06 – Comments on shifting U.S. tariff policy, including American and Chinese leadership’s concession that things might have gotten out of hand, and Treasury Secretary Scott Bessent’s hints at lower tariffs in the future. 

07:18 – Discussion on President Trump’s public battle with Fed Chair Powell on interest rates, questions around the Powell’s job security and the notion of an independent Federal Reserve, and how this all impacts the bond market. 

12:08 – Analyzing the relatively small 6% dip to the equity markets year-to-date amid ongoing volatility, and how negative sentiment and positive momentum can work together to push the market higher. 

17:35 – Looking ahead to next week’s earnings reports and indicators to watch out for, chiefly Friday’s employment report. 

 
Additional Resources

Key Questions: What Is the Mar-a-Lago Accord and Why Should Investors Care? | Key Private Bank

Key Questions | Key Private Bank
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In this week's jam-packed Market Minutes recap, hear from our team of experts as they share their perspectives on the latest economic reports. Our panel shares detailed insights into CPI inflation, initial unemployment claims, tariffs, the equities and bond market, and rate cuts. 

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy
Rajeev Sharma, Head of Fixed Income
Stephen Hoedt, Head of Equities

03:48 – The Bureau of Labor Statistics released a favorable Consumer Price Index (CPI) inflation report showing inflation for March, month-over-month, declined for the first time since May 2020, at -0.1%
04:47 – Initial unemployment claims for the week ending April 5 were reported at 223,000, remaining stable

05:41 – Comments on the considerable market volatility, within the equities market, brought on by recent U.S. tariff policies 

11:41 – Mentions of ‘Prospect Theory’, and a reminder of its principles, as the equities market, more specifically the Volatility Index (VIX), looks to be in crisis mode 

14:20 – Remarks on bond market volatility and its effect on credit spreads, investment grades and yields

19:08 – While a 90-day pause on reciprocal tariffs has been announced by the President, the Federal Reserve (Fed) may follow suit with a pause on cutting rates at the next two upcoming Federal Open Market Committee (FOMC) meetings

20:10 – Final comments on what U.S. companies are doing to prepare earnings guidance for the second quarter (Q2:2025) after the uncertainty regarding tariffs

Additional Resources

Key Questions: Do Cracks in the Credit Markets Mean US Corporates’ Financial Health Has Cracked? | Key Private Bank

Key Questions | Key Private Bank
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Weekly Investment Brief
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In this week's jam-packed Market Minutes recap, hear from our team of experts as they share their perspectives on the latest economic reports. Our panel shares detailed insights into the ISM Report on Business, new non-farm payroll data, tariffs, the equities market, and rate cuts.

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

01:13 – The ISM Report on Business was released and indicators showed Manufacturing has continued to remain in a contractionary phase, while Services continues to be in an expansionary phase for the fifth year

01:49 – The Bureau of Labor Statistics New Non-Farm Payroll was reported above expectations for March at 228,000 

02:32 – Reactions on the recent White House press conference surrounding U.S. President Trump’s executive order on tariffs

03:06 – Comments on the new U.S. tariff policy, soon to be established, and what can U.S. and global markets expect from both universal and reciprocal tariffs

08:38 – Remarks on the equities market and its volatility after the new tariff policy was signed into order; experts are seeing possible trends in the markets with the current U.S. economy, similar to the initial shock in the economy during the COVID-19 Pandemic

12:59 – Based on recent ISM Report on Business and the new U.S. tariff policy, the bond market is predicting a higher chance of the U.S. economy heading into a recession, calling for the Federal Reserve to implement rate cuts, more than initially expected, in 2025

17:12 – Final comments on remaining invested in high-quality, diversified portfolios 

Additional Resources

Key Questions: How Much Tech Do You Really Own? | Key Private Bank

Key Questions | Key Private Bank
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Weekly Investment Brief
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In this week's jam-packed Market Minutes recap, hear from our team of experts as they share their perspectives on the latest economic reports. Our panel shares detailed insights into the U.S. Consumer Confidence report, GDP, PCE inflation, equities, the credit market, and municipal bonds.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy
Rajeev Sharma, Head of Fixed Income
Stephen Hoedt, Head of Equities
Tim McDonough, Director of Fixed Income Portfolio Management

03:20 – The Conference Board’s U.S. Consumer Confidence report was released and showed a decline in overall consumer confidence due to factors such as the stock market, inflation, and others

03:58 – The final estimate of Gross Domestic Product (GDP) for the fourth quarter 2024 was reported at 2.4%, slightly revised up from prior estimates 

04:41 – The Bureau of Economic Analysis reported Core PCE inflation at 0.4% month-over-month in February, as well as 2.8% year-over-year, both unfavorable

06:11 – Comments on the equities market and how the market’s volatility is influencing investors’ thinking surrounding trades

11:31 – Though the recent PCE inflation report was less than favorable, the credit markets, investment grade and high yield bond spreads don’t seem to be adversely affected by the reading, as of now

15:22 – Remarks on the municipal bond market and changing dynamics of yield opportunities for investors

Additional Resources

Key Questions: How Much Tech Do You Really Own? | Key Private Bank
Key Questions: How Do We Invest in Tech? | Key Private Bank

Key Questions | Key Private Bank
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Weekly Investment Brief
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In this week's jam-packed Market Minutes recap, hear from our team of experts as they share their perspectives on the latest economic reports. Our panel shares detailed insights into the recent FOMC meeting, credit markets, and the yield curve

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy
Cindy Honcharenko, Director of Portfolio Management
George Mateyo, Chief Investment Officer
Rajeev Sharma, Head of Fixed Income

Key points include:

01:34 - This Week's Market and Economic Updates: February 2025 saw a 0.2% increase in retail sales, a 0.7% increase in industrial production, and a 4.2% increase in existing home sales
04:19 - FOMC Meeting: The Fed kept the federal funds rate unchanged at 4.25% to 4.50%, with projections for 2025 including 1.7% real GDP growth, 2.8% core PCE inflation, and 4.4% unemployment
09:52 - Credit Markets: Credit spreads remain resilient despite market volatility, with high demand for corporate bonds
13:44 - Yield Curve: The yield curve steepened after the Fed meeting, with front-end yields moving lower faster than longer-term yields
14:43 - Sentiment and Volatility: Equity market sentiment is bearish, similar to levels seen in 2009

The episode concludes with the panelists sharing their basketball predictions for the NCAA tournament.

Additional Resources
3/19 FOMC Recap

Key Questions: How Much Tech Do You Really Own? | Key Private Bank
Key Questions: How Do We Invest in Tech? | Key Private Bank

Key Questions | Key Private Bank
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Weekly Investment Brief
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In this week's Market Minutes recap, hear from our team of investment experts as they share their perspectives on the latest market and economic activity. Our panel shares detailed insights into the JOLTS report, CPI and PPI data, the equities market, tariffs, foreign government spending, the credit market, and the upcoming FOMC meeting. 

 
Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy
Donald Saverno, Director of Investment Research
Rajeev Sharma, Head of Fixed Income
Stephen Hoedt, Head of Equities

01:46 – The Job Openings and Labor Turnover Survey (JOLTS) report was outlined 7.7 million job openings for January 

01:58 – Both Consumer Price Index (CPI) and Producer Price Index (PPI) reports were released with CPI inflation down 0.2% from January, reporting at 2.8% for February

02:56 – Comments on the recent equities market volatility after this week's 10% drop

09:48 – Comments on tariffs and government spending among other foreign markets such as Europe and China; While the U.S. equities market seems to be in a down trend, other nations don’t seem to share the same trend

15:59 – Comments on the admirable resilience of the credit market, investment grades, and high yield bond spreads due to an abundance of liquidity 

18:18 – Expectations for the upcoming Federal Open Market Committee (FOMC) meeting  and how recent economic data such as CPI, PPI, and PCE inflation rates and reports may affect the conversation

Additional Resources
Key Wealth National Call Replay 

Key Questions: How Much Tech Do You Really Own? | Key Private Bank 

Key Questions | Key Private Bank
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KBCM Disclosure

In this week's Market Minutes recap, hear from our team of investment experts as they share their perspectives on the latest market and economic activity. Our panel shares detailed insights into PMI data, the Fed’s Beige Book, the Employment Situation Report, the credit market, the U.S. dollar, and the upcoming Key Wealth National Call. 

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

01:28 – The Purchasing Managers’ Index (PMI) revealed the overall manufacturing data dropped from January to February still proving manufacturing is in a contractionary state longer-term 

02:27 – The Federal Reserve (Fed) released their Beige Book of economic data 

03:15 – The Employment Situation Report showed the nonfarm payroll data at 151,000, with modest revisions for December and January   

07:57 – Comments on the credit market, investment grade and high yield bond spreads  

15:44 – Comments on the U.S. dollar and how it’s being impacted by trade policies and implementation of tariffs 

19:05 - Reminder for the upcoming Key Wealth National Call Wednesday, March 12th at 1:00pm EST/10:00am PST 

Additional Resources

Key Questions: How Do We Invest in Tech? | Key Private Bank 

Key Questions | Key Private Bank
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Economic & Market Research
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KBCM Disclosure