Head of Fixed Income Research and Strategy @SchwabResearch. Disclosures: aboutschwab.com/social-media
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Check out our latest episode of #OnInvesting! @LizAnnSonders and I chat about what's happening under the surface of the equity markets, and how investors should be thinking about the recent move up in yields.
Our latest #OnInvesting podcast episode has dropped, on which @CollinMartinCS and I focus on what rising interest rates are really signaling, why stock market strength is masking weakness in breadth beneath surface, and how investors should think about bond allocations in higher-for-longer rate environment: schwab.com/learn/story/what-…
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Looking for investor questions!
For an upcoming video series, I'll be answering your biggest questions about the bond market and fixed income investing—from the Fed outlook, what's happening with Treasury yields, and where there may be opportunities today.
I want to address the questions that are top of mind for you. Please share your questions in the comments, and let me know what fixed income topics you'd like to see covered.
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I had the pleasure of joining @MikeTownsendCS on his #WashingtonWise podcast this week. It was great timing given the recent rise in bond yields. We discussed the recent Fed rate hike—and more importantly, what comes next—as well as what’s been driving long-term Treasury yields higher, what may (or may not) be accomplished by the Treasury’s upsized liquidity buybacks, and where we see opportunities in the bond market today.
Give it a listen and share with a friend!
schwab.com/learn/story/bond-…
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We've updated our bond market views following last week's Fed rate hike.
We expect at least one additional rate hike by year-end, with one more possible later this year or sometime in 2027. Inflation trends will dictate how much tightening is necessary.
We've also raised our near-term expected range for the 10-year Treasury yield to the 4.5% to 5% area. As we're seeing now with the yield currently above 5%, there may be periods of time when it fluctuates in and out of that range. As we discuss in this commentary, we think additional upside should be relatively limited.
Our "below benchmark" average duration guidance remains since the 10-year Treasury yield tends to peak near the last rate hike of a cycle, not the first. While upside may be limited, we don't think investors will necessarily miss the opportunity to earn these high yields. With an uncertain outlook, we prefer short- and intermediate-term maturities.
schwab.com/learn/story/fed-h…
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Catch me on @CNBCClosingBell today at 4pm ET. Looking forward to chatting with @michaelsantoli about the latest bond market action.
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That happened quick - the 10-year Treasury yield is now up to 5.12%. If that seems like a sharp move, it is. It's the largest one day increase since April 7th, 2025, a few days after last year's tariff announcements.
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The 10-year Treasury yield rose firmly above 5% following this release
Remarkable strength from the US PMIs in September per @SPGlobalPMI ... manufacturing rose to a 52-month high while services rose to a 59-month high
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Check out our latest episode of the #OnInvesting podcast. @LizAnnSonders and I chat about this week’s much anticipated Fed decision, what lies ahead, and what that might mean for the markets.
schwab.com/learn/story/whats…
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This isn't likely to be "one-and-done" for hikes but also probably won't be the start of an extended hiking cycle. My commentary on today's FOMC decision explains:
schwab.com/learn/story/fomc-…
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“Today’s policy action will support a timelier return to the Committee’s 2 percent goal.”
This is in-line with the “speed” comment from last week.
Federal Reserve outlook: shifting from hold to hike
We now expect at least one Fed rate hike this year, with the first hike likely coming next week.
We had been in the “hold” camp for a number of months but had acknowledged that the risks to a hike had been increasing. Last month, we included this in our written commentary:
But our conviction in a prolonged pause has faded as the odds of a rate hike later this year have increased. Inflation remains a concern, the economy is resilient, partly driven by artificial intelligence-related capital expenditures, and the labor market generally remains stable, albeit with some recent softness.
Those factors are still in play today, and Fed Chair Kevin Warsh explained in Jackson Hole that underlying inflation trends have not meaningfully improved. Speed matters—while inflation has trended lower since 2022, progress has stalled and the Fed has now missed its target for five and a half years. With inflation above target, a stable labor market, and a resilient economy, a hike seems necessary to get inflation back down to target.
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Looking forward to joining @YahooFinance today at about 2:15pm ET and talking with @joshuahlipton and @juleshyman about the FOMC's decision.
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Federal Reserve outlook: shifting from hold to hike
We now expect at least one Fed rate hike this year, with the first hike likely coming next week.
We had been in the “hold” camp for a number of months but had acknowledged that the risks to a hike had been increasing. Last month, we included this in our written commentary:
But our conviction in a prolonged pause has faded as the odds of a rate hike later this year have increased. Inflation remains a concern, the economy is resilient, partly driven by artificial intelligence-related capital expenditures, and the labor market generally remains stable, albeit with some recent softness.
Those factors are still in play today, and Fed Chair Kevin Warsh explained in Jackson Hole that underlying inflation trends have not meaningfully improved. Speed matters—while inflation has trended lower since 2022, progress has stalled and the Fed has now missed its target for five and a half years. With inflation above target, a stable labor market, and a resilient economy, a hike seems necessary to get inflation back down to target.
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On this week's #OnInvesting podcast, I had the pleasure of chatting with @LizAnnSonders about lessons learned over her career on Wall Street, including her favorite quotes from legendary investors and from her favorite books.
This was a fun one for me, where I got to sit back and hear from one of the best in the business about key principles we should all follow, like humility, adaptability, and emotional discipline.
Then, Liz Ann was joined by Ivy Zelman to discuss trends in the housing market. Give it a listen!
schwab.com/learn/story/housi…
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All eyes are on the 10-year Treasury yield inching towards 5%, but today's move up in the 2-year Treasury yield is the largest one-day move in over a year.
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On last week's episode of #OnInvesting, @LizAnnSonders and I discussed rising bond yields and what it means for the economy as well as corporations.
Here's a short clip where we discuss how the rise in yields might not be having much of an impact on corporations given strong corporate profit growth.
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The 10-year Treasury yield is back above 4.8% as the price of Brent crude topped $100. The 20-day correlation between the 10-year yield and the price of oil is at its highest since late July.
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Another great chat with @LizAnnSonders on our #OnInvesting podcast:
Our latest #OnInvesting podcast episode has dropped on which @CollinMartinCS and I dish on Warsh’s hawkish JH speech: schwab.com/learn/story/warsh…
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Great chatting with @sam_vadas and @KaseyMcCurdy about the recent move up in Treasury yields and how incoming data may influence upcoming Fed decisions.
.@KaseyMcCurdy and @CollinMartinCS join #MorningTradeLive and host @sam_vadas to discuss why Treasury yields are up so much, Friday's jobs report, earnings expectations, the Fed, and how bonds can balance a portfolio.
📽️ The Big 🖼️ on @SchwabNetwork
nitter.net/i/broadcasts/1rGmqpbpN…
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