Volatile Bond Market Signaling Changes to Economy

The traditionally sleepy bond market has been acting weird lately, with unusual volatility that is sending signals about the broader markets and the economy. Collin Martin, director and fixed income strategist at the Schwab Center for Financial Research, joins host Mike Townsend to discuss how to assess what’s going on in the bond market and its implications for all investors. He discusses changes in the yield curve, what to expect from the Fed on interest rates, the impact the fight over the debt ceiling may have on the bond market, and how changes in interest rates are hurting cash-strapped companies. Collin also shares his thoughts on risks to bond investing, where the opportunities might be and how investors can make smart choices. 

In addition, Mike looks at four key takeaways from last week’s Congressional hearings on the recent bank failures, including bipartisan support for new regulations on mid-size banks, possible increases to FDIC insurance levels, and tougher punishments for mismanagement by bank executives. He also provides an update on some movement in the standoff in Washington over raising the debt ceiling.

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

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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.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here 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 decision. 

All expressions of opinion are subject to change without notice in reaction to shifting market 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. 

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

Investing involves risk, including loss of principal. 

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.

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