Midyear Outlook: The Fed & the U.S. Economy

KATHY JONES: I'm Kathy Jones.

LIZ ANN SONDERS: And I'm Liz Ann Sonders.

KATHY: And this is On Investing, an original podcast from Charles Schwab. Each week, we analyze what's happening in the markets and discuss how it might affect your investments.

Well, Liz Ann, it's June, and we are here giving listeners a little more context about what we're anticipating for the second half of the year. So in this episode, it's just you and me. We have a nice conversation going, I hope, and we're going to spend some time just digging into the broader macroeconomic outlook and, of course, central bank policy.

LIZ ANN: That's right, Kathy. And as always, I want to start out by saying that you can find a lot more about our various midyear market outlooks, including lots of charts and graphs at schwab.com/learn. And we have had guests on covering part of this outlook with Collin and Cooper, and I had Kevin. We even had broader conversations about the policy outlook.

But now you and I are going to kind of wrap it all up with a bow and maybe share some of the perspectives that weren't covered in some of those conversations. Obviously, one of the key stories this year has been about inflation, and that has just rippled through pretty much everything. It has affected sentiment, sentiment from a market's perspective, sentiment in terms of consumer.

It obviously has meant a nonstop change in expectations around Fed policy. Will they, won't they, when, by how much? And then of course, we're also in a bull market in equities. Although we're in a bull market at the index level, not every individual stock would necessarily agree with that statement. So we'll have to unpack that a little bit, but we are going to focus particularly on two broad topics: the U.S. economy writ large and what's going on with the Fed and interest rates and how that affects our outlook for the asset classes that we live, eat. and breathe on a day-to-day basis. So Kathy, maybe start with what you think is top of mind in terms of the inflation outlook and the Fed outlook.

KATHY: Yeah, I mean, as we've talked about numerous times, Liz Ann, inflation is coming down. And despite the fact that sentiment seems to be that it's not coming down enough or it's never going to get back to the Fed's target rate, we're actually getting pretty close to where the Fed wants to see it. Two percent is the Fed's target. We're looking at core PCE closing in on about 2.5%. In fact, that is where the Fed's projections for the end of this year would indicate they expected inflation to be. That's six months ahead of what the Fed projected for the decline in core PCE. That's really good news on the inflation front. And if that trend continues, which kind of looks like it will, that sets up the potential for some rate cuts by the Fed. Now, the other big indicator, of course, is employment.

There, there's signs of slower job growth, fewer job openings, and most importantly for the Fed, the unemployment rate is starting to rise. So it's already up to 4% from a low of 3.5% last July. I think the last shoe to drop for the Fed would be a slowdown in wage growth. It's running about 4% year over year. Still a little high relative to pre-pandemic average. That would be closer to about 3.

Particularly if we have good productivity continuing, 3% would not be something that would be out of the question for keeping that sort of demand-side inflation in check. So overall, we're looking for two rate cuts from the Fed and starting in September, like September and December, as long as those indicators continue to move in the right direction. I want to just go back to you right now though and talk about the economy kind of in general. Looks like we've got a slowdown going, but it certainly, as you pointed out, has not been a smooth ride in terms of the economic indicators.

LIZ ANN: Not only not a smooth ride, but so many cross currents and bifurcations, which we highlighted in the equity and economy part of our outlook. And it's happened within economic data. It's happened within the stock market. But that's not really a new phenomenon. Going all the way back to the early part of the pandemic, especially when the stimulus kicked in, you really saw that division open up between goods and services, in terms of where the initial burst of growth came from on the goods side, the initial burst of inflation happened on the goods side. We've since seen that roll over. We've had individual recessions in manufacturing and housing and housing-related and a lot of consumer-oriented products. We actually, on some breakdowns, are now in deflation territory in terms of the goods side of inflation statistics. We've just had the later offsetting strength on the services side.

That has helped the labor market because services is a larger employer. By nature, the services components of inflation are a bit stickier. And so that has been what has kept inflation from coming down to the Fed's target maybe a little bit more quickly. One of the interesting things, too, a couple of bifurcations that are of note. One is within the inflation data, and this is a bit more of a recent phenomenon. I would love your thoughts on what the Fed-reaction function is to this breakdown. We did put a chart in our outlook about the discretionary versus non-discretionary components. And we did it for the Consumer Price Index only because our access via Bloomberg to historical PCE data is limited because of just some seasonal adjustments. And I think most people are more broadly familiar with the CPI. And so we applied the exercise, so to speak, to that, the non-discretionary, the needs components of CPI, things like anything healthcare related, insurance costs, those are still running at about a 6% inflation pace where we're pretty much at the zero line. And it wouldn't surprise me if we went into deflation territory for the discretionary components, the wants components. So what are your thoughts? Because obviously the primary tool that the Fed has with interest rate policy can affect quite substantially the demand side of the economy, but are there limits to the transmission mechanism of monetary policy into those non-discretionary components of inflation that just have been incredibly sticky on the high side?

KATHY: As the saying goes, it's a blunt tool, right? Monetary policy is a blunt tool. It tends to affect everything at once, but it can't be precise. It can't target a certain segment of the economy very well. Certainly interest rate sensitivity is higher in housing and a few other areas, but overall, trying to be sort of surgical in terms of striking inflation is really, really tough.

So I do think they have a decision to make. Do they want to look at the overall numbers? They have parsed out housing and rents in particular because they know that's kind of a funky calculation, the way it flows through. And they have that super core, you know, PCE that they watch. Can they parse out even more carefully, or do they want to parse out even more carefully, you know, this wants-versus-needs part. Clearly, they would like to see everything kind of converge at close to 2%, but boy, that would be very hard to achieve with just monetary policy. And it is troublesome that we have areas like insurance that, you know, really, really tough for anybody to kind of get their arms around how to slow that down. The factors working on that are just, almost global between climate change and legislation, etc. That's a really tough one to tackle. So I don't think that they're inclined to wait for everything to get to 2% because I think by the time we get there, half of it's going to be in deflation, right? So probably my guess as a reaction function is to hope that everything continues to trend lower from here in terms of rate of change, and if they get to a comfortable reading, and you get a slowdown in the economy and particularly a slowdown in the labor market, then I don't think the Fed will sit around and wait for some of those other factors to click in. I mean, healthcare, that's been a story for decades now. And again, I'm not sure how much the Fed wants to kill the economy to get healthcare costs down or to get insurance costs down.

It's a tough situation. It's a very tough situation.

LIZ ANN: At least one month doesn't a trend make, of course, but we did get some modicum of welcome news on the auto insurance front, which has been sort of the number one hottest component of inflation measures in that we had a month-over-month decline. It's a little too soon to start hanging the victory banner on auto insurance. But I wanted to also mention another bifurcation, and given that, you know, next week we've got a lot of jobs related data, and I'd love your thoughts on this, is between the two surveys that the Bureau of Labor Statistics conducts. So they have the establishment survey from which payrolls are generated, and that's basically counting companies. And then they have the household survey, and in conjunction with the labor-force participation rate, that is, the combination is, what generates the unemployment rate. So two different surveys, the household survey counts people, essentially. And if you go back the past two years, really covering the early stage of the recovery out of the pandemic, plus the Fed's tightening cycle, the establishment survey suggest 6.9 million jobs have created been created. The household survey suggests only 3.2 million. That's an extraordinarily widespread, wider than the norm. And in particular, I wanted to … you and I haven't talked about this. So I'm asking one of these questions where I actually don't know what you're going to answer. So this is hopefully as interesting to me as it is to our listeners. But there's the QCEW survey, a census survey that's done that helps inform the Bureau of Labor Statistics when they do what's called their annual benchmark revisions, which won't happen officially until the first quarter of next year. But there are economists taking the census data and trying to put together an estimate for what is universally thought to be payrolls that have overstated actual job growth, maybe to the tune of … I've seen 60,000 a month. I've seen 80,000 a month. Let's call it 70 on average. So didn't know if you have dove into any of that work and have a sense of what—again, we have to wait till the first quarter of next year—what we might hear from the BLS when they do those revisions.

KATHY: Yeah, I have looked at it, and you're right, it looks like it's coming out around 60, 70,000 a month, which, you know, over time is a pretty significant miss in terms of where the BLS has things versus the household survey. So I think that, yeah, downward revisions seem to be likely.

There are other factors that play into it, and as you and I have discussed so many times, this cycle is so odd and so different in trying to assess the impact of some of the survey data on the final numbers when we get them. It's always the case that the revisions to payrolls happen over years. We pay attention in the last couple of months, but those revisions take place over years and years and years as more data come in, more seasonal adjustments come in, etc. So you know, we could look back three years from now and say, "Well, there you go. You know, that was the key." Won't do us much good today.

LIZ ANN: And that's really important because we live in the initially reported numbers when they're happening. And then when we look at historic data, we have it with the benefit of revisions that at the time we didn't know. So it's almost an apples-to-oranges comparison when you think about the current environment and initial releases relative to past cycles.

KATHY: Yeah, absolutely. I used to keep track of the initial reports back in the days when I kept everything in notebooks, which I don't do anymore. But just for that reason, because the revisions could, you could look back at the data and look back then at the price action and say, "Well, why did the market do that?" You know, it matched up at the time with what we thought we knew. But I do think the Fed will take it into consideration, but you know, broadly speaking, they're just as constrained as we are by the information in front of them. So I think they'll just continue to react to the data that we have. I think the one thing that concerns me is this data-dependence policy. The risk is at turning points, they are going to be behind. They were in terms of inflation going up. They may be again in terms of unemployment rising or inflation really coming down. But that is the decision that they've made. I think rather make the mistake on getting inflation lower than expected rather than the mistake of allowing it to revive.

LIZ ANN: You know, the other thing you talked about surveys. Another big problem that is more of a recent phenomenon is just a pretty significant drop in response rates. It's happened within the establishment survey, within the household survey, within the JOLTS survey for job openings. It's even happened in the widely watched ISM PMIs, both on manufacturing and services side. And there's all sorts of explanations thrown out there as to why that has occurred.

But that is what's happened. And in something like the JOLTS report, which everybody pays a lot of attention to simply because it's a statistic that the Fed cites all the time. So a data-dependent Fed saying they focus on this, and the rest of us ought to focus on it too, even though I quibble sometimes with that survey in part because the response rate has been cut, I think, more than in half from about 70% down to 30%. So that's another aspect to this unique environment that means we're again comparing today's orange to history's apples.

KATHY: Well, I think the good news is because of some of the gaps in the data and the surveys, we've got more private sector data now that's pretty reliable. When it comes to employment, I look at the Indeed.com data on job openings. And again, nothing's perfect. No data series is going to capture everything perfectly. But it does seem to give us a pretty consistent pattern. So we can kind of cross-check the private sector stuff with the public sector stuff and see kind of where we're landing on that. And if they're moving in the same direction, that gives me confidence. If they're diverging, then it's really tough to kind of figure out what's really going on under the surface.

LIZ ANN: Yeah, regardless of response rates and surveys, I think you and I both agree that it's not that the inflation data isn't as important anymore—it absolutely is—but it's in conjunction with the labor market and various subcomponents of the labor market. As you mentioned, wages as a feeder into inflation, certainly something the Fed is keeping an eye on. And there are a number of rules out there with regard to inflection points in the labor market and moves up a certain amount in the unemployment rate and what that has meant in the past in terms of recession signals. We had Claudia Sahm on this podcast, and there is the so-called Sahm rule using a moving average of unemployment. There's another one that I keep track of, and for what it's worth, it did just have sort of the cross occur, which is when the unemployment rate, just the stated U3 unemployment rate, moves above its 36-month moving average, so a three-year moving average. And that has been pretty much foolproof. There was some funky stuff that happened with those two in the early '80s, back-to-back recessions, that meant that timing wasn't quite as precise, but that's been a pretty clear indicator. And then we've had this move up in unemployment claims, with which bears watching. We've had sort of false moves up in the past that ultimately rolled back over, but I think the green light for the Fed probably comes from a combination of disinflation continuing but also whether it's at the wage front or something within the labor market that they can say, "All right, it's time for us to ease policy."

KATHY: Yeah, I mean at the end of the day the two things that matter are inflation and the unemployment rate, right? That's really the mandate for the Fed along with financial stability. But as those two go, so goes Fed policy eventually. This has been a little bit of a weird cycle because they've been lagging, but overall, I've got to think that those are the two things we really have to keep an eye on.

LIZ ANN: Yeah, and I wanted to just transition a little bit to the market. I know we really dove into the equity market and the bond market to a large degree with the prior episodes having Cooper and Collin and Kevin, but I wanted to get your most up-to-date thoughts in terms of your world and in particular the part of your world that crosses over into my world, especially in the last year or so, which has moves in, not just Fed expectations, but Treasury yields. And I've been getting an increasing number of questions with indexes in my world, like the S&P 500®, sporadically back to all-time highs and questions around how can the market just have sort of ripped higher in light of uncertainty with regard to inflation and the Fed not having started cutting interest rates yet. And I remind people that the indexes have done very well, and we have hit many all-time highs for the Nasdaq, for the S&P. There's very low volatility. At the index level, we've gone historically long stretches of time without a 2% move down on a single day. You can check all those boxes as historically outside the norm, but you've got, say in the case of the Nasdaq, the average member within the Nasdaq has had a maximum drawdown this year of 38%.

There's churn and rotation and weakness going on under the surface. You just wouldn't pick that up if you're only focused on the index-level because the small handful of names that are large-cap names, the multiplier is such that they've had strong performance. They're not necessarily the best-performing stocks, but you multiply it by their cap, and it hugely flatters these cap-weighted indexes, but there's a lot more churn and weakness under the surface and a lot of where that weakness has resided. 

And this is one of the things we showed in the outlook. Things like comparing stocks of companies with strong balance sheets versus weak balance sheets. You can look at within smaller-cap indexes the performance of the zombie companies, the companies that don't have sufficient cash flow to pay interest on their debt versus the non-zombie companies all tied into the rate backdrop. And so there have been significant hits in the stock market tied to Fed policy, tied to yields. You just have this relative or perceived immunity on the part of many of the mega-cap, rich-cash-flow kind of companies to that rate cycle. But I want to turn it back to you because I continue to think that especially moves in Treasury yields can be a defining backdrop to what equities do broadly or specifically. What are your latest thoughts on the yield backdrop?

KATHY: Yeah, I think the good news for the equity market is we are expecting yields to continue to drift down. We do expect, again, that cycle of Fed rate cuts to start in the fall. And if we go out across the yield curve, which is still inverted in the Treasury market, we do expect some decline, but more of a bull steepener where short-term rates come down more than long-term rates, and the yield curve normalizes, so it's no longer inverted.

Ten-year yields, depending on how inflation plays out and the timing, 4% certainly seems doable, even 3.75, 3.80 for a low is not out of the question if the Fed cuts over time and we get that fed funds rate closer to target around 3% or so. I don't know that we're going all the way back to a 2, 2.5% fed funds rate, depends, maybe in a recession. Not likely to go back to zero or anything that low. 

LIZ ANN: Let's hope not.

KATHY: Yeah, let's hope not. We don't want another catastrophe to cause that to happen. But something in the 3% area for fed funds and a 3.80 to 4% in 10-year Treasury, not out of the question at all on a sort of a cyclical basis. But I think that one of the points we tried to make in our outlook is look beyond the Treasury market.

You know, we have been encouraging people to take on more duration because we do see yields coming down. We suggest people who like these fat, you know, 5% yields, lock them in for a certain amount of time in the future. And you can do that in other markets where the yield curve's not inverted, like investment-grade corporate bonds. Those bigger companies, as you say, with the stronger balance sheets, good cash flow, they've locked in a lot of their financing for the long term. They're not really susceptible to this refinancing risk the way smaller companies are. So high-yield companies, companies that borrow in the CLO market, companies that borrow in the bank-loan market, they don't have that sort of balance sheet strength and they are facing rising financing costs going forward and maturities going forward. And the market's not really reflecting that.

You know, for someone who wants to lock in 5% plus for five to 10 years into the future, if we're right that yields are going to come down, that's going to look like a good solid way to have cash flow in your plan. So I think if it plays out that way with the Fed cutting, you know, maybe this broadening out that I hear a lot of equity strategists talk about. They talk about it in a hopeful manner. That can play out. I guess if the Fed overplays its hand and the economy really comes down, then maybe that doesn't happen. But I think from the fixed income point of view, it should be supportive to that broadening out if we get those refinancing rates down for the mid-to-smaller-size companies. And that's going to be a question of timing.

LIZ ANN: Yeah, and let me use that as a jumping off point and share more specificity within the equity market of our thoughts, not just for the second half of this year, but even beyond that. I do think you need to see a sustainable move down in yields in conjunction with the Fed shifting from pause mode to easing mode, absent an aggressive easing cycle because they're combating a recession or some sort of financial crisis. I think everything suffers then, but you do have the possibility of seeing more broadening out. 

You know, on that note, though, we're starting to see some subtle signs of less concentration in terms of what stocks are driving the market. It's right to focus on groups like the Magnificent Seven, or it really now should be the Magnificent Six. Tesla is kind of at the bottom of the barrel among that grouping of stocks and doesn't quite fit in the neatly tied package of tech and tech-related and AI. But I think there's often a lot of conflating that's done when groups like that are discussed and an assumption that they're the six or seven or five best performers. They're the biggest contributors to S&P returns or Nasdaq returns because the multiplier of their cap size. But a lot of people don't realize that within the S&P, and at least as we're taping this, only one of the Magnificent Seven is on the top 10 list of best-performing stocks year to date. And maybe no surprise, it is Nvidia. But Nvidia is not the best performing stock. Super Micro Computer is the best performing stock. And what's interesting about the top 10 list, again, this is just price performance, and we're not taking the size of the company into consideration as a contributor to overall performance. But three of the top 10 stocks in the S&P this year are utilities. And one stock on the top 10—which, I'm old, so I'm often old school—is actually GE, which is like, "Go, old school!"

And I don't think people realize that. And then if you were to look at the top 10 best performers within the Nasdaq, none of the Magnificent Seven are on that list, and none of them are anything close to household names. In fact, I'm not really familiar, other than peripherally, the names with any of them. So let me stay on Nvidia for a second. Earlier in the year, the correlation between Nvidia and its stock price performance and S&P's performance, index performance, hit, I think, a high of 0.92 or 0.93. You know correlation numbers, but as a reminder to our listeners, 1.0 is a perfect correlation. That means what Nvidia is doing, S&P is doing. That recently dropped to 0.16, I think, was their recent low. 

KATHY: No. What?

The last time we ran it a couple days ago, I think it was 0.23. So up a little bit from there, but it's no longer a huge driver of the S&P, and that really shifted in the immediate aftermath of their earnings report, which they announced in conjunction with earnings the 10-for-1 stock split. For whatever it's worth, in the four trading days after their earnings release, the stock was up more than 20%, and the S&P was actually down a little bit. And then that type of less-correlated performance has continued. So it just tells you that there's a lot of action going on outside of that small handful of names, and with that comes opportunity. But what we're seeing in particular is we continue to think performance is going to be more consistently defined at the factor level than at the sector level, meaning "factor" is just another word for characteristic. So if you look at groupings of stocks, say, that have strong balance sheets versus weak balance sheets. I mentioned that's a chart that we have in our mid-year outlook. Or zombie companies versus non-zombie companies, high-interest coverage versus low-interest coverage. That sort of quality wrapper of things like strong free cash flow and profitability and strong balance sheet and interest coverage. 

Stocks that screen well on those have consistently been leadership names, regardless of what sector they fall in, where sector-oriented leadership has been much more volatile. So our message is stay up in quality, use factor-based screening, at least in addition to, or maybe even in lieu of, sector-based screening. And that's within the equity market, that there are opportunities down the cap spectrum, but as you go down the cap spectrum, particularly, you've got to stay up in quality.

KATHY: Yeah, that perfectly aligns with what we're saying in fixed income as well, because all those metrics that you named, or almost all of them, are how we look at corporate credit, right? So you know, you want the strong balance sheet, you want the cash flow, you want interest coverage, etc. So that's why we're much more in favor of staying up in credit quality and not dabbling too much in the lower credit quality, because eventually when the economy does turn south or we hit some of these bumps in the road, that's where you feel it.

Now, I do want to pivot because this is an election year, and we all try, yeah, we all try to avoid …

LIZ ANN: No. I'm sorry. I feel like I'm breaking up …

KATHY: Now, what I'm going to focus on is not the election, because I don't want to talk about that either. But I do want to focus just at least briefly on the deficit and the debt, because that, I think, more than anything is what worries a lot of investors. And so far, I always say it doesn't matter until it matters to the bond market.

And so far, the bond market is fine, and I think the bond market will continue to be OK. But, you know, elections have consequences and, you know, how do you see this playing out? Are you concerned about the equity market and the growing concern about debt and deficits?

LIZ ANN: So yeah, and you and I have talked about this a lot. We've written about it. We just wrote a fairly comprehensive report that you contributed to, I contributed to, Mike Townsend contributed to on the debt and deficits. And it's a deep dive, which we won't go into details, but it is posted on Schwab.com, the Learn tab. So take a look at that. I think it's … I don't know if I remember the full title, but it's like "Myths and Realities, Debt and Deficit," something just … when I look for my own stuff, I often just go on Google and type in "Sonders" and some portion of the title that I remember, and it comes right up. So that's my cheat sheet way of getting to our reports. 

I think the most important implication of this high and rising burden of debt and deficits, and of course we have the recent news, which I believe, yeah, post-dated our outlooks as well as that debt report that we wrote was a little bit of a whiff on the part of the Congressional Budget Office. Oops, instead of about a $1.6 trillion deficit for fiscal year 2024, it's going to be around $2 trillion. So a $400 billion shortfall in terms of their initial estimates. So that obviously doesn't help the situation, but you're right to point out that for now, anyway, we're not seeing a riot in the bond market. And I think you're accurate in saying it's not a problem until the bond market tells us it's a problem. And so far, so good. We would probably see as a lead-in to that a much weaker U.S. dollar. That has not been the case. You've written about and spoken a lot about ample, ongoing demand for Treasuries.

But on all the studies we've done long term about the implications of high and rising burden of debt, there isn't a correlation of any kind really to yields, to inflation. I think those are two big misperceptions, but where there is a correlation is to the rate of economic growth, and a high and rising burden of debt and deficits tends to have a suppressing effect on overall economic growth especially when you see an accelerating share of what's coming in going to interest payments and not maybe other productive sources. So that's with us. That's not a perspective down the road thing. That's part and parcel of this problem right now, and I don't think is different this time.

KATHY: Yeah, I 100% agree, and I thought you did a great job on your section there of that report. Only thing I'll point out, and then we should probably talk about next week, is, even as we speak, speaking of the dollar hitting new highs, Japanese yen falling to the lowest since the '80s against the U.S. dollar, and the trade-weighted dollar index hitting new highs.

Clearly there's not any signal from the markets at this stage of the game that this is the big concern. We'll see when we get closer to the election if it becomes more of an issue, but this stage of the game it doesn't seem to be something that the market's too concerned about. 

OK, so that's our outlook for the second half of the year. Let's take a look ahead at next week's numbers. Liz Ann, what are you going to be watching for as we head into July?

LIZ ANN: Well, it's a busy week. It's an incredibly busy week. We've got both versions of the so-called PMIs, Purchasing Managers' Index. There's the S&P Global version, both on the manufacturing side and the services side, and then the more widely watched ISM version also on the services and manufacturing side. We talked earlier in the program about job openings via the JOLTS survey. That comes out. We've got Challenger's measure of layoff announcements and ADP in advance of the all-important jobs report at the end of the week. And I think, do we get FOMC minutes as well?

KATHY: We do on the 3rd. So right around the Fourth of July holiday, we've got all the important numbers. So some of us will be working, even though we'd rather take a long weekend. It looks like the timing of the calendar has worked out to sabotage a lot of those weekend plans. But yeah, a lot of important stuff coming out, watching all the same indicators, particularly the payroll numbers now. I think they take on increasing importance as we start to see unemployment tick up. If it ticks up some more, that could be a signal for the Fed to move. If it settles down again below 4%, then things get pushed back into the future.

LIZ ANN: Would you expect that if the unemployment rate ticks up a little bit more that that raises the likelihood of maybe a telegraph at the July meeting by the Fed for a September start?

KATHY: If it's serious, I'm looking more for that telegraph at the August Jackson Hole meeting. So it's often been the time, as you know, in the past when the Fed announces sort of a new perspective or "The research supports blah, blah …," and they unveil a policy indication. So I think probably we'll wait until Jackson Hole and late August before we get any updated new signal from the Fed.

LIZ ANN: So as always, thank you all for listening. We do very much appreciate it. And that is it for us this week. But you can always keep up with us in real time on social media. Make sure you're following the real us on social media. I'm @LizAnnSonders, and I'm only on X and LinkedIn.

KATHY: And I'm @KathyJones—that's Kathy with a K—on X and LinkedIn as well. If you've enjoyed the show, we'd be really grateful if you'd leave us a review on Apple Podcasts, a rating on Spotify, or feedback wherever you listen. You can also follow us for free in your favorite podcasting app. 

And next week on the show, I'll be speaking with Joe Brusuelas. He's the chief economist for RSM, a global research firm, and he's got a lot of experience as a bond forecaster and in the middle market space. So stay tuned for that conversation.

For important disclosures, see the show notes, or visit schwab.com/OnInvesting.