With the historic government shutdown behind us, we dig back into key economic data captured over the duration of the shutdown: highlights include a modest improvement in housing activity, favorable labor market indicators despite data being somewhat stale, and mixed signals from the Federal Reserve amid uncertainty over December rate cuts. Equity markets showed heightened volatility, with strong earnings failing to sustain momentum, suggesting potential consolidation through year-end. Fixed income markets remain highly sensitive to Fed commentary, reflecting divergent views among policymakers. We also take a walk down memory lane to our 2025 predictions from last year—accurate on most calls—and preview the themes we think will impact 2026: global shifts toward nationalism, AI-driven disruption, and structural changes in financial markets. Please join us on December 3 for our last National Call of the year, when we’ll dig into these topics and take questions from the audience.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy
George Mateyo, Chief Investment Officer

Stephen Hoedt, Head of Equities

Rajeev Sharma, Head of Fixed Income

01:53 – Current Market and Economic Updates. Housing market improvement with existing home sales. Labor market stability, with unemployment claims holding and payrolls showing growth. Federal Reserve uncertainty, as October FOMC minutes reveal mixed opinions on rate cuts. Corporate earnings reports, which were strong but met with negative market reactions

08:04 – Equity Market Volatility and Seasonal Trends. Equity markets experienced an “outside day” with sharp reversals despite strong earnings. After strong September–October rallies, November–December may see consolidation rather than a typical year-end rally

11:46 – Fed Policy and Fixed Income Market Outlook. Fixed income markets are highly sensitive to Fed signals amid data gaps from the government shutdown. Divergence among Fed members on rate cuts vs. a pause creates volatility.

15:11 – We look back at our predictions from last year for 2025 trends and assess how accurate they were, and look ahead to our predictions for 2026, which we’ll cover in more depth at our upcoming December 3 webinar (registration link below).

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This week, we cover the historic end of U.S. penny production resulting from high manufacturing costs and obsolescence. Market updates focused on lingering uncertainty due to delayed economic data from the recent government shutdown, while Federal Reserve policy remains unclear, with rate cuts seen as a toss up ahead of December’s meeting. With holiday shopping well underway, we discuss consumer trends, noting resilience despite crosscurrents like tariffs and inflation, with strong performance from major retailers and signs of a “K-shaped” economy. Overall, our current outlook suggests cautious optimism for 2026, supported by fiscal and monetary tailwinds.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy, Key Wealth,

George Mateyo, Chief Investment Officer, Key Wealth

Rajeev Sharma, Head of Fixed Income, Key Wealth

Bradley Thomas, Managing Director of Equity Research, KeyBanc Capital Markets

00:23 –The U.S. Mint has stopped producing pennies after 232 years due to high manufacturing costs, sparking discussion on its economic implications and impact on transactions.

02:03 –The recent and historic 43-day government shutdown has finally ended. We discuss its impact, and the resulting delays in critical economic reports like unemployment claims, CPI, and retail sales, and its role in creating uncertainty across markets.

06:18 – We highlight uncertainty around Federal Reserve policy and changes, potential December rate cuts, the lack of clarity due to missing data, and upcoming leadership turnover, including the president and CEO of the Federal Reserve Bank of Atlanta Raphael Bostic’s planned retirement in February and Fed Chair Jerome Powell’s term as Fed Chair ending in 2026.

11:20 – Special guest Brad Thomas, Managing Director of Equity Research with KeyBanc Capital Markets, joins the podcast this week to discuss consumer resilience amid crosscurrents such as tariffs and inflation, noting strong performance from major retailers, bifurcation between affluent and lower-income consumers, and shifts in spending patterns toward home-related goods.

16:09 –Our experts examine how tariff increases could affect holiday shopping, with potential price pressures in categories like toys, and how retailers are managing these challenges.

19:02 –Rising delinquencies in credit cards and loans are rising concerns for lower-income consumers, while overall outlook remains cautiously optimistic thanks to anticipated fiscal and monetary stimulus supporting spending and investment opportunities.

Additional Resources

Read: Higher Education Changes in Recent Years

Prepare: Top 10 2025 Year-End Planning Strategies for Business Owners

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This week, we explore the economic impact of the ongoing government shutdown, now in its 38th day, and its effect on labor market data and investor sentiment. Our experts discuss alternative employment indicators, strong Q3 earnings, and the influence of AI on market performance. They also examine the Federal Reserve’s cautious stance on inflation and interest rate cuts amid data uncertainty. Finally, the conversation touches on the Supreme Court’s review of Trump-era tariffs and its potential implications for market volatility.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Head of Fixed Income

Stephen Hoedt, Head of Equities

02:09 – We analyze available data to fill in the gaps left by unpublished reports due to the ongoing government shutdown. We discuss labor statistics around unemployment, layoffs and job growth and vacancies.

04:55 – The prolonged shutdown is dampening sentiment and creating uncertainty due to missing federal economic data.

07:47 – In equities, we highlight upward momentum in the stock market amid strong earnings reports, while cautioning about speculative froth and a market pullback.

11:45 – We explain the Fed’s dual mandate, inflation concerns, and how mixed signals are affecting bond yields and rate cut expectations.

16:31 – We consider the legal review of Trump-era tariffs and how a ruling could impact Treasury issuance and market volatility.

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Cynthia Honcharenko, Director of Fixed Income Portfolio Management, joins the podcast to deliver a report on this week’s Federal Open Market Committee (FOMC) meeting; be sure to read her companion piece, “The Gentle Cut: Easing Without Euphoria” on our Weekly Investment Brief feed. Our discussion tracks how the equity and bond markets behaved leading up to, and following, the meeting, and what to expect going forward. We also touch on this week’s earnings reports from several big tech companies, and what positive trade talks between the United States and China might mean for the future.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

Cynthia Honcharenko, Director of Fixed Income Portfolio Management

Rajeev Sharma, Head of Fixed Income

Stephen Hoedt, Head of Equities

01:30 – Expected reports on initial unemployment claims, GDP, and inflation were not published this week due to the ongoing government shutdown, which is on track to be the longest in history once it surpasses the 2018 record of 34 days.

03:20 – Coverage of this week’s FOMC meeting, including the 25 basis point cut to the federal funds rate, two diametric dissents, the themes and opinions driving that decision, and Chair Powell’s warning that another rate cut in December is far from guaranteed as we see signs of a weakening labor market, elevated inflation, and a lack of data to make informed decisions due to the government shutdown.

05:43 – In reaction to the FOMC meeting and Powell’s assertion that a December rate cut is less likely than previously expected, the markets experienced a bit of a reversal of recent gains that were driven by that expectation.

07:43 – We discuss the five candidates that Treasury Secretary Scott Bessent revealed this week. They include three current and former Fed Governors, the current Director of the National Economic Council, and a BlackRock executive.

10:03 – Q3 earnings reports continue to send the stock market higher. The reports from this week’s big companies were Amazon and Alphabet, which were both positive, Apple, which underwhelming but not bad, and Meta and Microsoft, which were both somewhat negative.

12:25 – Positive news from trade talks between the United States and China might reduce the elevated sentiment of geopolitical risk that hit the markets in the first few months of the year on tariff threats, and which has been a question mark ever since.

14:58 – The fixed income market has seen some widening in credit spreads following the FOMC meeting, but generally positive credit conditions and future corporate bond issuance herald a robust November.

Additional Resources

Read: The Gentle Cut: Easing Without Euphoria – 10/29/2025 FOMC Update

Ask: Key Questions: Active ETFs or Mutual Funds: Which Belongs in Your Portfolio?

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Amid the ongoing government shutdown, we look at alternate sources of data to draw a picture of what’s happening with inflation, the labor market, and home sales. Our experts provide insights on the market’s reaction to these reports, the anticipated Federal Open Market Committee (FOMC) meeting next week, and the performance of different sectors and asset classes. We also touch on some unusual market dynamics, with low-quality and high-beta stocks outperforming higher-quality companies. Finally, we talk sandwiches in celebration of National Bologna Day.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Stephen Hoedt, Head of Equities

Rajeev Sharma, Head of Fixed Income

02:06 – We highlight three key reports from the week: state-level initial weekly unemployment claims suggest no cause for concern, existing home sales are up slightly, and—despite the government shutdown—the Bureau of Labor Statistics was allowed to compile and release a mixed but overall favorable Consumer Price Index report.

06:00 – Corporations seem to be navigating increased costs due to tariffs by cutting their labor force.

08:50 – The Fed is likely to cut interest rates by 25 basis points at next week’s FOMC meeting, with many expecting another 25 basis point cut in December, and several more next year.

10:44 – October continues to be a rally month for the bond market thanks to low market volatility, tight credit spreads, and abundant liquidity.

12:59 – Equities continued to climb and set all-time highs as third quarter earnings season continues, with a spotlight on reports from Microsoft, Amazon, and Meta next week.

15:53 – We discuss differences in quality within the equities and bond markets, and posit an apparent shift in principles and heuristics in equities between the pre- and post-pandemic periods.

Additional Resources

Read: Key Questions: Should Investors Get on Board With the Reshoring of American Manufacturing?

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The ongoing government shutdown delayed updates of the Consumer Price Index, Producer Price Index, weekly unemployment claims, and retail sales. Still, there was plenty to cover from this week, including the potential impact on the banking sector amid emerging credit concerns, the strength and state of the consumer, recent earnings reports, a dip in oil prices, and the outlook for the Federal Reserve's monetary policy for the remainder of the year and in 2026 once a new Chair is selected.

Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Stephen Hoedt, Head of Equities

Rajeev Sharma, Head of Fixed Income

01:35 – The National Federation of Independent Business' Small Business Optimism Index for the month of September fell two points to 98.8, but remains above the historical average. Conversely, the Uncertainty Index rose to 100 – the fourth highest level in 51 years.

02:21 – The Federal Reserve's Beige Book report showed little change in overall economic activity, with some districts reporting slight to modest growth and others noting slight softening.

04:20 – The earnings reports that have been released thus far for the third quarter paint a favorable picture of a robust stock market, despite signs of softening consumer spending and an uptick in volatility and uncertainty.

11:57 – Investors moved toward safe haven assets amid some overall economic softening and news of emerging credit risk.

12:38 – Fed Chair Powell’s recent comments point towards a move away from quantitative tightening, an end to the balance sheet runoff in the next few months, and likely two more rate cuts in 2025.

15:31 – As the government shutdown continues to fuel confusion, volatility, and uncertainty, our advice to investors is to maintain a long-term perspective with a diversified portfolio and avoiding rash decisions based on dramatic news and short-term fluctuations.

Additional Resources

Read: Key Questions: What Does MAHA Mean for Healthcare and Consumer Staples Companies?

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Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer
Rajeev Sharma, Head of Fixed Income
Stephen Hoedt, Head of Equities

01:58 – Our team of experts discusses the impact of the government shutdown on economic data releases, inflation concerns, and labor market trends.

04:35 – Analysis of bond market movements, expectations for Federal Reserve rate cuts, and insights from recent FOMC minutes.

08:24 – The panel examines high market valuations, the impact of “hopes and dreams,” and the effects of vendor financing and developments in the AI sector.

13:34 – Insights into gold’s record highs, central bank buying, treasury market trends, and expectations for Q3 earnings season.

Additional Resources
Read: Key Questions: What Does MAHA Mean for Healthcare and Consumer Staples Companies? | Key Private Bank

Read: Key Questions: How Does AI Impact Corporate Companies and Fixed-Income Investors?

New White Paper: An Introduction to Direct Indexing | Key Private Bank

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Speakers:

Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer

Rajeev Sharma, Head of Fixed Income

00:54 – We review the key economic data and market activity from the past week, including the Job Openings and Labor Turnover Survey (JOLTS) report, the September ADP National Employment Report showing a significant decline in private sector employment, and the Institute for Supply Management (ISM) manufacturing and services PMI reports.

02:45 – The current government shutdown prevented the release of data on weekly initial unemployment claims as well as reports from the Bureau of Labor Statistics around new nonfarm payrolls and the unemployment rate.

03:23 – One side effect of the shutdown is that the integrity of the data that we did receive may be less reliable. However, the overall labor market is in a "low firing, low hiring" environment, with pockets of strength in consumer spending and AI infrastructure investment.

05:36 – We discuss the history of government shutdowns and how the lengthier examples in recent years may be due to increasing partisanship, and what short- and long-term effects a shutdown may have on the labor force, the markets and the economy.

09:39 – Treasuries rallied as investors sought safe-haven assets after the shutdown took effect. Attention then turned to the Fed to see whether their recently begun rate-cutting campaign will continue, as is expected at the Federal Open Market Committee meeting later this month.

14:43 – Despite a year of atypical trends and behavior, this shutdown is expected to go as most past shutdowns have: volatility might jostle the equities and bond markets in the short term, but after the shutdown ends and the temperature goes back down, the markets tend to rebound and resolve at higher levels than prior to the shutdown.

Additional Resources

Read: Key Questions: How Does AI Impact Corporate Companies and Fixed-Income Investors?

Key Questions | Key Private Bank

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