In this episode, Liz Ann Sonders and Kathy Jones analyze this week's FOMC meeting and its impact on the economy and financial markets. The Fed's message was one of patience, with no change in interest rate policy. While the Fed acknowledged some caution about inflation, Fed Chair Powell said he believes that the current interest rate is high enough to bring inflation down in the long run. The Fed also announced that they will begin tapering their quantitative tightening policy. The conversation also touches on the impact of bond yields on the equity market, the recent drop in commodity prices, and the concerns about rising debt and deficits.

Finally, Kathy and Liz Ann offer their outlook on next week's indicators and upcoming economic data.

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.

All corporate 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.

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.

The information and content provided herein is general in nature and is for informational purposes only. It is not intended, and should not be construed, as a specific recommendation, individualized tax, legal, or investment advice. Tax laws are subject to change, either prospectively or retroactively. Where specific advice is necessary or appropriate, individuals should contact their own professional tax and investment advisors or other professionals (CPA, Financial Planner, Investment Manager) to help answer questions about specific situations or needs prior to taking any action based upon this information.

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

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

Indexes are unmanaged, do not incur management fees, costs, and expenses, and cannot be invested in directly. For additional information, please see schwab.com/indexdefinitions.

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, 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

​Mortgage-backed securities (MBS) may be more sensitive to interest rate changes than other fixed income investments. They are subject to extension risk, where borrowers extend the duration of their mortgages as interest rates rise, and prepayment risk, where borrowers pay off their mortgages earlier as interest rates fall. These risks may reduce returns.

Correlation refers to a statistical relationship between values, whether positive (one number goes up and another also goes up) or negative (one number goes up and another goes down). Observed correlations can be strong or weak. Correlation is useful because it can often indicate a predictive relationship.

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In this episode, Liz Ann Sonders and Kathy Jones analyze the March 2024 CPI data and its impact on the bond markets and Fed policy. CPI came in higher than expected, with significant increases in housing, clothing, and transportation services, probably closing the door on a June rate cut, as the Fed will likely have to be patient and wait for the numbers to improve.

Then, Kathy interviews David Beckworth. They discuss the concept of nominal GDP targeting as an alternative approach to monetary policy. He explains that instead of targeting the price level or inflation, nominal GDP targeting focuses on stabilizing total dollar spending in the economy. Beckworth also discusses how nominal GDP targeting could have been used during the pandemic and its potential benefits for central banks. He highlights the importance of following nominal GDP and asset prices as indicators of the health of the macro economy.

Finally, Kathy and Liz Ann offer their outlook on the coming week's economic data.

David Beckworth is the host of the Macro Musings podcast and is a senior research fellow at the Mercatus Center at George Mason University as well as a former international economist at the U.S. Department of the Treasury.

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.

All corporate 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.

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

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.

The information and content provided herein is general in nature and is for informational purposes only. It is not intended, and should not be construed, as a specific recommendation, individualized tax, legal, or investment advice. Tax laws are subject to change, either prospectively or retroactively. Where specific advice is necessary or appropriate, individuals should contact their own professional tax and investment advisors or other professionals (CPA, Financial Planner, Investment Manager) to help answer questions about specific situations or needs prior to taking any action based upon this information.

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

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.

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

Indexes are unmanaged, do not incur management fees, costs, and expenses, and cannot be invested in directly. For additional information, please see schwab.com/indexdefinitions.

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