Transcript of the podcast:
After you listen
Last week saw more signs that the economy is thriving, with a blowout jobs report and continued wage growth, while the Fed increased the interest rate and signaled an extended fight against inflation. Kathy Jones, Schwab's chief fixed income strategist, joins host Mike Townsend to dig into these mixed messages and what they mean for the bond markets. They discuss whether the Fed can avoid a recession and bring the economy in for a "soft landing." Kathy also weighs in on why she thinks "bonds are back" and whether that means the traditional 60/40 portfolio is back as well. And she gives her take on municipal bonds and where the dollar is headed.
Also, Mike provides the latest on the debt ceiling standoff following the first face-to-face meeting between the president and the House speaker on the issue. And he discusses the agenda for the key committees on Capitol Hill that oversee the markets, including plans to examine cryptocurrency and environmental, social, and governance focused (ESG) investing.
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Digital currencies, such as bitcoin, are highly volatile and not backed by any central bank or government. Digital currencies lack many of the regulations and consumer protections that legal-tender currencies and regulated securities have. Due to the high level of risk, investors should view Bitcoin as a purely speculative instrument.
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. Lower rated securities are subject to greater credit risk, default risk, and liquidity risk.
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