The last several weeks have seen unusual market volatility, not just in the stock market but in the bond market as well. Fixed income investors have been struggling to make sense of the on-again, off-again tariff policy and its impact on the U.S. economy. In this episode, host Mike Townsend welcomes Collin Martin, director and fixed income strategist at the Schwab Center for Financial Research, for a robust discussion about how tariffs are impacting the bond market, companies, the economy, and the Federal Reserve's monetary policy decisions. Collin shares his perspective on where the Fed might be headed and whether the president's threats to fire Fed Chair Jerome Powell are undermining its independence. They also discuss the dollar and whether its position as the world's reserve currency is in jeopardy. And Collin offers his thoughts on where fixed income investors can find opportunities in this uncertain environment.

In addition, Mike provides updates from Washington on the ongoing negotiations around the massive budget bill of tax and spending cuts and the president's recent proposal for government funding for the coming fiscal year, and he reflects on the 50th anniversary of a regulatory decision that paved the way for the accessible markets that investors enjoy today.

WashingtonWise is an original podcast for investors from Charles Schwab. For more on the series, visit schwab.com/WashingtonWise.

If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts

IMPORTANT DISCLOSURES:

Investors should consider carefully information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing.

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 policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.

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.

Tax-exempt bonds are not necessarily a suitable investment for all persons. Information related to a security's tax-exempt status (federal and in-state) is obtained from third parties, and < Name of Legal Entity, for e.g., Charles Schwab Investment Management, Inc., dba Schwab Asset Management> does not guarantee its accuracy. Tax-exempt income may be subject to the Alternative Minimum Tax (AMT). Capital appreciation from bond funds and discounted bonds may be subject to state or local taxes. Capital gains are not exempt from federal income tax.

Preferred securities are a type of hybrid investment that share characteristics of both stock and bonds. They are often callable, meaning the issuing company may redeem the security at a certain price after a certain date. Such call features, and the timing of a call, may affect the security’s yield. Preferred securities generally have lower credit ratings and a lower claim to assets than the issuer's individual bonds. Like bonds, prices of preferred securities tend to move inversely with interest rates, so their prices may fall during periods of rising interest rates. Investment value will fluctuate, and preferred securities, when sold before maturity, may be worth more or less than original cost. Preferred securities are subject to various other risks including changes in interest rates and credit quality, default risks, market valuations, liquidity, prepayments, early redemption, deferral risk, corporate events, tax ramifications, and other factors.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.

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.

Currency trading is speculative, volatile and not suitable for all investors.

There are risks associated with investing in dividend paying stocks, including but not limited to the risk that stocks may reduce or stop paying dividends.

Money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in the fund.

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

0525-U7A4

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

When Markets Talk, the Bond Market Speaks Loudest