With the Federal Reserve cutting rates by 50 basis points at its September meeting, what are the implications for the bond market and the economy? In this episode, Kathy Jones and Liz Ann Sonders analyze the market's reaction to the rate cut, the balance between panic and greed in investment strategies, and the upcoming economic indicators that could influence market movements. Their discussion highlights the importance of understanding labor market trends and consumer sentiment in the context of inflation and economic policy.

This week, Kathy sits down with Claudia Sahm, a former economist for the Federal Reserve and the White House Council of Economic Advisors. Perhaps best known for the recession indicator that bears her name, Claudia Sahm is now the chief economist for New Century Advisors.

Kathy and Claudia discuss the labor market, highlighting its resilience and the need for a sustainable expansion. The discussion moves on to inflation, with Claudia explaining that recent inflation has been driven by supply-side shocks rather than demand. She expresses confidence in the Fed's ability to reach its 2% inflation target. The conversation also touches on the debate within the Fed and the potential impact of the Fed's communication on financial markets. Finally, Kathy and Liz Ann offer their outlook for next week's economic indicators and data.

You can follow Claudia Sahm's newsletter, Stay-at-Home Macro, at https://stayathomemacro.substack.com/.

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 Disclosures

The 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.

The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.

All names and market data shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Supporting documentation for any claims or statistical information is available upon request.

Investing involves risk, including loss of principal.

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Indexes are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly.

For more information on indexes, please see schwab.com/indexdefinitions.

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.

Small cap investments are subject to greater volatility than those in other asset categories.

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.

Forecasts contained herein are for illustrative purposes only, may be based upon proprietary research and are developed through analysis of historical public data.

(0924-TT5B)