Transcript
Host (0:00)
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Liz Ann Saunders (0:29)
Bloomberg Audio Studios Podcasts Radio News all right.
Host (0:34)
Let'S get right to our next guest because this leads us in perfectly to Liz Ann Saunders, chief investment strategist at Charles Schwab. Liz, what did you take away from the Fed's action this week and particularly as it relates to maybe what they may do in 2026?
Liz Ann Saunders (0:51)
Yeah, and good morning to you both. Happy holidays. Obviously, the cut was not a surprise. They don't tend to buck market expectations, especially when they are particularly dominant in one direction or another. We did expect what could be defined as a hawkish cut where they certainly didn't lay out any promises for the glide path going forward. And that's what happened. And just before I came on, you were talking about increasing dissents on the Fed. I agree. I think that that is a good thing. I think it also helps to temper some of the concerns about independence of the Fed and maybe something that either implicitly or or explicitly Powell is supporting that we can hear from lots of V. And I think it's a reminder that the C in FOMC is committee, not chair. So I think from the standpoint of that amount of uncertainty with regard to Fed independence, I think dissents and a wider array of views is a positive.
Co-host (1:46)
Yeah. And speaking of new voices, Liz, and we're going to get a new Fed chair. We know this in May. So how do you, how are you thinking about interest, the interest rate landscape in 2026? Are we going to get more, do you think, than that one cut that Powell was talking about this week?
Liz Ann Saunders (2:03)
Tell me what the data is going to be and I could give you an easier way to I mean when you're a data dependent Fed and then you had the, the effects of the government shutdown, which means we don't, we haven't had any official labor market data since the September release, we don't have GDP data, we don't have national income and product accounts, corporate profit margins data. So I think as we start to get the data, I do think that the Fed as it relates to their data dependency, they don't have a blind eye inflation clearly. But I think the needle mover from a reaction function will continue to be on the labor market. So you could have a scenario where they cut more than the one or two that is priced into expectations. I'm not sure that that's universally a positive thing if it comes because of serious deterioration in the labor market. But I think the labor market is what's driving the bus right now.