At last week's remarkable Federal Reserve meeting, the Fed's decision to cut the baseline interest rate for the first time in 2025 took a backseat to questions over which members would get to vote at the meeting. On this episode, Kathy Jones, Schwab's chief fixed income strategist, joins host Mike Townsend to break down the Fed's struggle to balance inflation concerns with a softening job market—and what they might do if they get it wrong. They also look at the political drama surrounding Fed Governor Lisa Cook and the controversial confirmation of Stephen Miran to the Fed board, spotlighting serious questions about the central bank's independence and the broader implications for financial markets. Kathy shares her insights on the bond market, including the impact of fiscal deficits, Treasury yields, and the weakening dollar. She offers practical considerations for bond investors in a time of uncertainty, emphasizing the importance of a bond's term and quality.

And Mike provides the latest on two key issues in Washington: the growing risk of a government shutdown and the debate over the future of corporate-earnings-reporting requirements.

WashingtonWise is an original podcast for investors from Charles Schwab. For more on the series, visit schwab.com/WashingtonWise.

If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.

IMPORTANT DISCLOSURE

The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.

This material is intended for general informational and educational purposes only.

This should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions.

All expressions of opinion are subject to change without notice in reaction to shifting market, economic or political conditions. Data contained herein from third party providers is obtained from what are considered reliable sources.

However, its accuracy, completeness or reliability cannot be guaranteed.

Past performance is no guarantee of future results.

Investing involves risk, including loss of principal.

All names and market data shown are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

International investments involve additional risks, which include differences in financial accounting standards, currency fluctuations, geopolitical risk, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks, including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors.

Lower rated securities are subject to greater credit risk, default risk, and liquidity risk.

Diversification and asset allocation strategies do not ensure a profit and do not protect against losses in declining markets.

This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, you should consult with a qualified tax advisor, CPA, Financial Planner, or Investment Manager.

Currency trading is speculative, very volatile and not suitable for all investors.

Performance may be affected by risks associated with non-diversification, including investments in specific countries or sectors. Additional risks may also include, but are not limited to, investments in foreign securities, especially emerging markets, real estate investment trusts (REITs), fixed income, municipal securities including state specific municipal securities, small capitalization securities and commodities. Each individual investor should consider these risks carefully before investing in a particular security or strategy.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.

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The coming weeks will see a series of major policy decisions in Washington that will play out in Congress and in the courts. On this episode, host Mike Townsend explores five key issues that are nearing resolution and discusses how the markets may react. He examines the Federal Reserve's plan to resume cutting interest rates and how the president's attempt to fire a Fed governor means the courts will have to resolve a fundamental question regarding the Fed's long-established independence. Mike also provides updates on the court battle over tariffs and the implications for the economy and the markets. And he addresses the risk of a government shutdown, Congressional action on cryptocurrency regulation, and the market ramifications of the federal government taking an ownership stake in Intel Corp.

WashingtonWise is an original podcast for investors from Charles Schwab. For more on the series, visit schwab.com/WashingtonWise.

If you enjoy the show, please leave a ★★★★★ rating or review on Apple Podcasts.

IMPORTANT DISCLOSURES

The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.

This material is intended for general informational and educational purposes only. This should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions.

All expressions of opinion are subject to change without notice in reaction to shifting market, economic or political conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Past performance is no guarantee of future results.

All names and market data shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

Investing involves risk, including loss of principal.

Performance may be affected by risks associated with non-diversification, including investments in specific countries or sectors. Additional risks may also include, but are not limited to, investments in foreign securities, especially emerging markets, real estate investment trusts (REITs), fixed income, municipal securities including state specific municipal securities, small capitalization securities and commodities. Each individual investor should consider these risks carefully before investing in a particular security or strategy.

Diversification and asset allocation strategies do not ensure a profit and do not protect against losses in declining markets.

Currency trading is speculative, very volatile and not suitable for all investors.

Cryptocurrency-related products carry a substantial level of risk and are not suitable for all investors. Investments in cryptocurrencies are relatively new, highly speculative, and may be subject to extreme price volatility, illiquidity, and increased risk of loss, including your entire investment in the fund. Spot markets on which cryptocurrencies trade are relatively new and largely unregulated, and therefore, may be more exposed to fraud and security breaches than established, regulated exchanges for other financial assets or instruments. Some cryptocurrency-related products use futures contracts to attempt to duplicate the performance of an investment in cryptocurrency, which may result in unpredictable pricing, higher transaction costs, and performance that fails to track the price of the reference cryptocurrency as intended.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.

(0925-CPZ4)

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.