Liz Ann Sonders and Collin Martin react to the Federal Reserve’s decision to hold rates steady, which included two dissents in favor of a hike and Chair Kevin Warsh’s continued concern about inflation. While the Fed emphasized patience and the need for more data, the market response was mixed: Short-term Treasury yields fell, longer-term yields rose, and equities swung as investors tried to interpret what the decision might mean for future rate moves.
The conversation then turns to the growing importance of quality and selectivity across markets. Liz Ann examines how higher borrowing costs are putting pressure on the massive AI and data-center build-out and creating sharper divides between profitable and unprofitable companies, as well as businesses with stronger and weaker balance sheets. Collin sees a similar dynamic in credit markets, where investment-grade corporate issuance has reached a record even as borrowing costs remain elevated. Both stress that headline market resilience can obscure pockets of stress beneath the surface.
Finally, Collin and Liz Ann look ahead to next week’s upcoming macroeconomic indicators and key data releases.
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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.
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