In this episode, our experts opine on the economy, considering three key indicators making a splash this week: unemployment claims are down, but so was the first quarter estimate of Gross Domestic Product (GDP), while inflation stayed stickier than hoped for in May. Meanwhile, bond yields moved higher, and the stock market is having a heyday, despite the dollar hitting a three-year low. We will be off next week for the July 4th holiday, and look forward to bringing you fresh insights the following week.

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

02:16 – Initial unemployment claims for the week ending June 21 came in at 236,000 – 10,000 lower than the prior week – which was a welcome sign given this figure’s recent upward trajectory.

02:43 – The final Gross Domestic Product (GDP) estimate for the first quarter of 2025 showed a 0.5% contraction, caused by an increase in imports ahead of President Trump’s insistence on widespread tariffs.

03:37 – Inflation – excluding food and energy – remained sticky in May, as the core personal consumption expenditures price index (PCE) ticked up to 0.2% month-over-month, and 2.7% year-over-year.

05:01 – Following a run of resiliency, key economic indicators appear to be following suit with the negative sentiment that has been pervasive in the first half of 2025.

09:47 – Fed Funds futures are pricing in a modest 20% chance of a rate cut in July, but expectations of the first rate cut in September appear more solid at 90% odds.

10:22 – Bond yields moved higher in reaction to the PCE inflation data, while the U.S. dollar dipped to its lowest level in three years.

11:58 – Investment grade credit spreads remain unchanged for the week and continue to trade at a very tight range.

13:39 – The stock market is enjoying all-time highs that will likely continue into next month, furthering the trend of July being the best-performing month of the year, based on historical data.

17:56 – The 90-day pause on tariffs announced in April is set to expire on July 9, though recent news suggests this is more of a soft target than a hard deadline.

Additional Resources

What Happens If the TCJA Expires? Why It Matters Now for Your Taxes and Your Legacy

Books and Podcasts for Your 2025 Summer Reading and Listening

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The Federal Open Market Committee (FOMC) met this week to report on dampened economic projections, forecast two potential rate cuts in the remainder of the year, and reaffirm the wait-and-see approach that has been a hallmark of Fed policy thus far in 2025. Our experts analyze what came out of the meeting, how investors should respond, and what the future may hold. We also break down the key provisions in the One Big Beautiful Bill Act as passed by the U.S. House of Representatives, what comes next in the Senate, and highlight four provisions that may impact you.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer
Cynthia Honcharenko, Director of Fixed Income Portfolio Management
Joe Velkos, National Tax Director, Key Wealth

02:12 – The Census Bureau’s Advance Retail Sales Report showed a 0.9% month-over-month dip in May, and April figures were revised to a 0.1% decline.

03:12 – U.S. industrial production fell by 0.2% in May, according to the Federal Reserve.

03:54 – At this week’s FOMC meeting, the Fed kept the federal funds rate unchanged at a target range of 4.25% to 4.50%.

04:07 – We look at key economic projections, including a lowered GDP growth median, higher inflation projections, and increased unemployment forecasts.

05:03 – The median FOMC forecast sees two 25 basis points cuts in 2025, though there appears to be disagreement among members with some expecting no rate cuts in 2025, while others expect only a single 25 basis points cut this year.

06:10 – The markets and analysts weigh in on the probability of rate cuts this year. Fed Chair Jerome Powell remains cautious and confirmed the Fed is positioned to respond as needed, especially considering uncertainty around the impact of upcoming tariffs on inflation.

10:45 – A discussion on who might succeed Jerome Powell as the next Chair of the Federal Reserve.

12:54 – Uncertainty across several fronts signals a wide range of possible outcomes in international and domestic markets and politics. For investors’ portfolios, diversification will be as important as it’s ever been.

15:14 – Joe Velkos, National Tax Director for Key Wealth, joins us to walk through the “One Big Beautiful Bill” passed by the House of Representatives on May 22.

19:07 – The bill faces opposition in the Senate, including among Republicans, making it unlikely that the bill will remain unchanged or that it will be passed before July 4th, as is President Trump’s goal.

20:18 – We highlight four key provisions of the bill: an increase to the maximum state local tax deduction, an increase to the lifetime gift and estate tax exemption, restoring the bonus depreciation for business owners, and the new proposed elimination of tax on tips and overtime pay.

Additional Resources

Watch the replay of our June 11 National Call

Key Questions | Key Private Bank
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In this week's episode, Ather Bajwa, Managing Director of Multi-Strategy Research, joins us to deliver a masterclass in private credit – what it is, why it’s important, and what to consider before investing. We also unpack new surveys and reports across a variety of topics including unemployment, inflation, and volatility. As usual, we look at where the markets are in light of the global and national news of the day, such as increasing conflict in the Middle East and the upcoming Federal Open Market Committee (FOMC) meeting.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy
Stephen Hoedt, Head of Equities

Ather Bajwa, Managing Director of Multi-Strategy Research

00:23 – The PGA U.S. Open tries to provide a bright spot during a week of somber news from around the globe, including the passing of Beach Boys’ keyboardist Brian Wilson.

01:50 – Initial weekly unemployment claims remain stable from the previous week.

02:18 – The Consumer Price Index shows mixed stories amid persistent inflation; the Federal Reserve’s target of 2% stays elusive.

03:23 – The Fed is unlikely to cut interest rates at next week’s FOMC meeting.

05:06 – Escalating tensions in the Middle East have a negligible downside effect on a stock marketing experiencing all-time highs.

07:33 – A University of Michigan survey of consumers and an American Association of Individual Investors survey indicate an overall improving attitude toward the economy, despite an uptick in the CBOE Volatility Index (VIX).

10:59 – An introductory overview of the trending private credit market.

15:02 – Why private credit is becoming increasingly popular, and what changes we’re seeing in the quality of participants.

17:35 – The advantages and considerations of private credit, and what to consider before making this investment.

Additional Resources

Key Questions: What Tax Proposals Are in the 'One Big Beautiful Bill Act' That All Taxpayers Should Be Aware Of?

Key Questions | Key Private Bank
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In this week's episode we unpack three reports about the labor market; the mixed results show an uptick in new job openings amid increasing initial weekly unemployment claims, though the unemployment rate remains steady at 4.2%. We also discuss the Federal Reserve’s Beige Book report, which shows elevated levels of consumer and commercial uncertainty ahead of the June 18 Federal Open Market Committee meeting. As always, we analyze how this news is affecting the equity and fixed income markets.

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

02:07 – The Fed’s Beige Book shows mixed growth across districts, and an increasing degree of policy and economic uncertainty.

02:59 – We introduce two reports about jobs and payrolls from the Bureau of Labor Statistics and another report from the Department of Labor on unemployment.

06:20 – Putting the news of the week in context of the overall uncertainty caused by the question of tariffs and trade policy.

07:24 – Equities appear to be on an upward trajectory calling the old “Sell in May and go away” adage into question.

10:05 – The Magnificent 7 companies’ stocks take diverging paths resulting from tariffs or noise from the Beltway.

12:10 – The bond market reacts to the nonfarm payroll news, while traders ease their expectations of future rate cuts.

13:27 – Treasury yields moved higher, though buyers remain standoffish amid the continuing debate on the U.S. fiscal deficit and tax policy.

15:27 – Credit spreads show an optimistic outlook, especially on corporate issuances.

16:31 – In a reversal of the historic norm, global central banks made moves to cut rates rather than following the U.S. Fed’s example.

Additional Resources

Join our June 11 National Call

Key Questions | Key Private Bank
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In this week's episode, we delve into the big economic news shaping our world and portfolios. We provide updates on the job market, modest gross domestic product (GDP) growth, the Personal Consumption Expenditures price index and an uptick in inflation, new tax policies and the National Deficit, and what the Federal Reserve might be thinking for the rest of this year and beyond (notably, the long-lasting implications of the potential loss of safe haven status in U.S. Treasury bonds).

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

George Mateyo, Chief Investment Officer
Rajeev Sharma, Managing Director of Fixed Income
Sean Poe, Director of Multi-Strategy Research

01:50 – Weekly unemployment claims were 240,000, an increase of 14,000 from the previous week’s claims

02:22 – The second estimate for first quarter of 2025 GDP came in at -0.2%, a minor improvement from the advance estimate of -0.3%. Contributing factors were reduced consumer spending offset by investment increases.

02:55 – In inflation news, the Personal Consumption Expenditures price index (Core PCE) came in at a 2.5% increase year-over-year; this was the second month of slower results but still above the Fed’s goal of 2.0%. Goods inflation continues to be deflationary, while Services inflation remains higher than desired.

05:19 – The trade war is not over as talks continue to evolve in unpredictable ways, exacerbating some of the swing we’ve seen in market behavior. Legal challenges to the imposition of President Trump’s tariffs further complicate global trade deals, suggesting that a measured and diversified approach to portfolio management is a sound course of action.

08:00 – The U.S. annual deficit sits at $1.9 trillion. Proposed tax cuts from the House of Representative would add as much as $2.6 trillion in borrowing, making a potential recession more challenging to manage. This, in addition to the recent downgrades of the U.S. Sovereign debt, may have negative effects on U.S. Treasuries.

09:38 – Minutes from the Fed’s May Federal Open Market Committee (FOMC) meeting were released this week. Compounding uncertainties have immobilized the Fed from making clear decisions on monetary policy. Two rate cuts are expected for the remainder of 2025, with the first cut potentially at the September FOMC meeting.

12:00 – The 10-year Treasury bond note yield is below 4.5%, which is well below this year’s previous peak, though the bond market is still less volatile than equities in times of economic and earnings uncertainty. Long-term investors are seeking to lock in yields of 5% or more and are considering padding their portfolios with high-quality corporate credit to mitigate future economic fluctuations.

14:40 – A primer on private equity: What it is, and what it looks like today. How might it fit into your investment strategy? We also provide an explanation of private equity secondaries investments and how they can be used.

17:09 – The private equity secondary market is projected to experience a 20%-25% increase in the market from 2024 and would then account for about a third of all private equity transaction value. Newsworthy recent examples of Harvard University and Yale University selling a portion of their private equity holdings to secondaries funds to free up liquidity in anticipation of an increased tax burden and future legal challenges.

Additional Resources

Join us on June 11 for our Midyear Investment Update

Key Questions | Key Private Bank
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Weekly Investment Brief
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In this week's episode, our experts unpack the past few days following positive news on tariff discussions between the United States and China. We also provide observations on the final earnings calls of the first quarter of 2025, changes in consumer sentiment, ongoing uncertainty around the Federal Reserve, what happened in the Treasury Bond market, and how proposed tax and spending plans from Congress will impact the federal deficit. Please note that we will not release a new episode next week in observance of the Memorial Day holiday weekend; we encourage you to take a moment to reflect on the history and meaning of the holiday as we begin the summer season.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

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

00:21 – A reflection on Memorial Day.

03:05 – A review of this week’s Consumer Price Index measure of inflation.

03:56 – The Consumer Price Index report showed month-over-month retail sales rose by 0.1% in April, while industrial production remained flat at a 0.0% change from March.

05:18 – Equity markets rose on news of a coordinated effort between the U.S. and China to rein in tariffs.

11:09 – A look into corporate news of the week in relation to mergers and acquisitions, earnings calls, and a surge in corporate debt issuance.

12:52 – The 10-year Treasury note yield rose to above 4.5% before coming back down towards the end of the week.

15:51 – Priorities seem to shift for Fed Chair Jerome Powell towards addressing employment shortfalls, while still maintaining an inflation target of 2%.

16:52 – A discussion about the potential impacts on the federal deficit and general investment strategy of the proposed tax reforms making their way through Congress.

Additional Resources

Key Questions | Key Private Bank
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Weekly Investment Brief
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In this week's episode, we review the news from Wednesday’s Federal Open Market Committee (FOMC) meeting, highlighting four themes: a slower path to rate cuts; rising risk of policy dilemma and potential stagflation; decisions will be made based on data, not any pre-committed timelines; a policy bias towards easing but with less conviction. Overall economic indicators remain stable, setting us up for a peaceful weekend to celebrate the mothers in our lives this Mother’s Day.

Speakers:
Brian Pietrangelo, Managing Director of Investment Strategy

Cynthia Honcharenko, Director of Fixed Income Portfolio Management

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

01:57 – Weekly initial unemployment claims ending May 3 came in at 228,000, leveling out last week’s larger than average increase, signaling that unemployment remains stable.

02:25 – The Institute for Supply Management (ISM) Services Report showed a tenth consecutive month of expansion in April, and effectively for the past five years. This further contrasts with the weak manufacturing economy.

03:17 – News from Wednesday’s Federal Open Market Committee, during which the Fed maintained its current target rate of 4.25% to 4.50%, citing ongoing economic uncertainties especially from recent trade policies. We explore four key themes to level set future expectations.

10:18 – Due to the Fed’s cautious wait-and-see approach, and given the Trump administration’s 90-day pause on tariffs, the Fed will likely not make any significant decisions prior to its July 30 meeting.

11:04 – A potential trade deal between the United States and the United Kingdom may inform what we can expect on overall trade policy going forward.

13:19 – Both the S&P 500 and NASDAQ-100 are hovering around or above their respective 200-day averages, signaling continuing improvement after the Liberation Day fallout.

16:40 – News from Apple and Google appear to validate the idea that Artificial Intelligence is disrupting industry writ large, and a future with a new list of “Magnificent Seven” stocks may come sooner than later.

Additional Resources

Key Questions: Is Jay Powell’s Job at Risk, and What Are the Risks for Investors? | Key Private Bank

Key Questions | Key Private Bank
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In this week's episode, our investment experts explore three major themes from the week: negative real gross domestic product (GDP) growth, inflation, and the labor market. We discuss how these factors affect equity and bond markets, and overall sentiment regarding the economy. We also consider if the relatively positive news from this week continues into the weeks and months ahead, or if the full negative impact of tariffs will make for a sobering summer.

01:51 – The advance estimate for the first quarter of 2025 real gross domestic product showed a 0.3% decrease, signaling the first negative quarter since early 2022.

03:02 – The Bureau of Economic Analysis released favorable data on PCE inflation, which was relatively flat month-over-month, and showed year-over-year growth of 2.3%, which was lower than both January and February.

03:57 – The labor market has a cautiously optimistic outlook based on this week’s Job Openings and Labor Turnover Survey (JOLTS) report, weekly unemployment claims, and better-than-expected growth in new nonfarm payrolls, which gave the markets a bump this morning.

09:13 – Expectations of an early rate cut in June from the Federal Reserve are falling as a result of the positive jobs report. Bond investors feel that future employment reports will be less optimistic, and are thus buying on the dip.

11:36 – Changing tax policy will likely be making news soon, especially on the question of tax-exempt status for universities, though existing bonds are unlikely to be affected.

14:09 – Equity markets hit a 20-day high following a handful of better-than-expected earnings reports this week, mostly from the technology sector.

15:34 – Volatility continues to decline from recent highs, and credit markets appear healthy as evidenced by tightening BBB versus BB credit spreads.

Additional Resources
Key Questions: What Is the Mar-a-Lago Accord and Why Should Investors Care? | Key Private Bank

Key Questions: Do Cracks in the Credit Markets Mean US Corporates’ Financial Health Has Cracked? | Key Private Bank

Key Questions | Key Private Bank
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