In this week's episode, our experts review the now-stale minutes from July’s Federal Open Market Committee (FOMC) meeting, Fed Chairman Jerome Powell’s new dovishness from the Jackson Hole Economic Symposium, and what to look out for in the coming weeks as we near the end of a notable summer.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Managing Director of Fixed Income

Stephen Hoedt, Head of Equities

02:30 – We highlight this week’s economic releases: the Labor Department reports that weekly unemployment claims rose slightly but remained stable over the past 18 months, and the National Association of Realtors reports that existing home sales rose by 2% in July.

03:43 – The July FOMC minutes were hawkish, and show Committee member concerns over tariff-driven inflation, elevated asset valuations, and that the current fed funds rate may not be far above neutral. The meeting pre-dated the weaker July employment report and subsequent shift in focus from inflation to the cooling jobs market.

04:52 – Federal Reserve Chair Jerome Powell appears to pivot towards a dovish stance and emphasizing the downside risks to the labor market at the Jackson Hole Economic Symposium; expectations of a rate-cutting cycle beginning in September shot up and Treasury yields dropped sharply in response.

07:47 – Political turmoil continues to put pressure on the Federal Reserve on allegations of mortgage fraud against Fed Governor Lisa Cook, who has been pressured to resign or face removal by President Trump.

12:45 – We discuss the apparent bifurcation in the economy, with weakness in consumer spending offset by strength in business investment, particularly in data centers and artificial intelligence.

16:46 – We anticipate how the market might react to an upcoming earnings report from Nvidia and news that the federal government is considering taking ownership positions in tech stocks.

Additional Resources

Read: Key Questions: How Does Key Wealth Define Quality Within Our Internally Managed Equity Strategies?

Watch: Planning Implications of the One Big Beautiful Bill (OBBB) Act

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This week was lighter on economic news and reporting—certainly when compared to the previous two action-packed weeks—so we’re shaking things up for this episode. Each expert brings to the table a news item that caught his eye this week, and one topic that might not be receiving enough attention. Topics include skyrocketing investment into artificial intelligence, the fractures at the Federal Reserve (see Additional Resources below for a link to past guest Cynthia Honcharenko’s take on the interesting dynamics taking place at the Fed), turmoil in the gold market, the changing demographics of the labor market amid evolving ways and means of working, and more. Wishing a happy International Beer Day and National Pickleball Day to those who celebrate; maybe not at the same time.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Stephen Hoedt, Head of Equities

02:23 – The ISM Services Purchasing Managers’ Index—a measure of the health of the U.S. services sector—dipped to 50.1 in July, down from June’s 50.8.

02:42 – Initial unemployment claims for the week ending August 2 were up 7,000 claims from the previous week, for a total of 226,000 initial claims.

03:32 – Investment in AI technologies exceeded $150 billion in the first half of the year, which may contribute to the increasing productivity in the workforce as measured by recent average revenue per employee figures.

05:52 – The Fed continues to fracture amid a surprise appointment of a temporary Fed governor to fill a recently-vacated seat.

07:28 – The ups and downs of Trump’s order to allow private equity investment in 401 (k) retirement plans.

08:40 – China is mentioned less in the news these days, but that doesn’t mean nothing newsworthy is happening there. Portfolio diversification through international markets is a good idea, and there’s some potential in the Chinese markets.

10:17 – A discussion on the turmoil in the gold markets on news of a 39% import tax on some gold coming into the U.S.

13:45 – With an outsized population of retirees on the horizon, and a new generation coming into the workforce with a very different jobs landscape, what’s the future of productivity?

15:02 – Diversification is the sound investment strategy for the day. We’re seeing some softness in the labor market, but most economic indicators are favorable. Still, things can be unpredictable, and a diversified portfolio can shield you from some targeted disruptions.

Additional Resources

Read: Key Questions: Cracks in the Foundation: Symbolic or Systemic? Fed Unity Frays as Policy Dissonance Grows.

Attend: August 19: Key Wealth's National Call: Planning Implications of the One Big Beautiful Bill (OBBB) Act

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In this week's episode, we discuss eight reports and news items that are impacting the economy today, and which will likely have lingering effects into the future; these touch on the labor market in regard to unemployment and payrolls, housing, inflation, Gross Domestic Product (GDP), earnings season, and – the big news of the week – what came out of the Federal Open Market Committee (FOMC) meeting and the lower than expected new non-farm payroll report. As always, we analyze these items and how they’re affecting the equity and bond markets, and what moves investors may consider making.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy
George Mateyo, Chief Investment Officer
Stephen Hoedt, Head of Equities

Rajeev Sharma, Managing Director of Fixed Income

Cynthia Honcharenko, Director of Fixed Income Portfolio Management

01:47 – We introduce the eight topics and reports that lay the groundwork for our discussion: weekly initial unemployment claims, job openings, existing home sales, GDP for Q2:2025, the Personal Consumption Expenditures (PCE) inflation figures, the jobs report showing underwhelming numbers for new nonfarm payrolls, a negative revision for the May and June figures, and a slight bump in overall unemployment, the FOMC meeting, and news from the midst of earning season.

06:30 – The big items from the FOMC: rates remain unchanged, two governors voice dissent, and no firm commitment on a September rate cut. The reasoning behind the continued fed funds rate is that inflation is still elevated, the labor market is robust, unemployment remains low, and inflationary pressures persist due to trade uncertainties.

07:42 – Fed Chair Jerome Powell touched on 7 themes during the post-meeting press conference: no rate cuts, monetary policy is restrictive, pressure from tariffs, conflicting pressures between inflation and the labor market, market pricing recalibration, Fed independence in rate setting in light of government borrowing costs, and acknowledging the notable dual dissents within the FOMC meeting.

09:35 – The likelihood of a September rate cut dropped to 39% at the time of the FOMC meeting, with a fourth quarter cut more likely. The dissent from governors Christopher Waller and Michelle Bowman seems less politically motivated than borne out of genuine care for the labor market.

12:38 – The labor market is stable but might be starting to show some cracks signaling a potential slowdown as layoffs are low but so is hiring.

17:01 – The 2-year Treasury yield, which is most sensitive to Fed policy, rose slightly following the FOMC meeting on Wednesday, then dropped significantly today in reaction to this morning’s jobs report – the biggest such reaction since 2004. Given this volatility, expectations of a September rate cut are now increasing.

20:07 – Shifting tariffs and trade policy seem to be hitting the stock market this week, with falling copper futures as a notable example.

21:16 – The Trump administration’s recent pushback against Powell’s wait-and-see approach to rate cuts appears prescient given the market reaction to today’s lukewarm jobs report. There’s now a higher chance of a Powell resignation as a Fed governor rather than finishing out his full term, after a potential replacement as the sitting Fed Chair.

24:14 – As earnings season continues, major tech companies are showing mixed results, with Microsoft and Meta reporting favorably in contrast to lackluster reports from Amazon and Apple.

Additional Resources

Read: What Are the Top 10 Provisions in the “One Big Beautiful Bill Act” That Will Impact Businesses?

Attend: August 19: Key Wealth's National Call: Planning Implications of the One Big Beautiful Bill (OBBB) Act

Key Questions | Key Private Bank
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