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Key Wealth Matters, a podcast series hosted by the experts of the Key Wealth Institute, explores the biggest news of today to determine how these headlines can impact wealth plans, financial strategies, markets, and investments.
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We gather data and information from specialized sources and financial databases including but not limited to Bloomberg Finance L.P., Bureau of Economic Analysis, Bureau of Labor Statistics, Chicago Board of Exchange (CBOE) Volatility Index (VIX), Dow Jones / Dow Jones Newsplus, FactSet, Federal Reserve and corresponding 12 district banks / Federal Open Market Committee (FOMC), ICE BofA (Bank of America) MOVE Index, Morningstar / Morningstar.com, Standard & Poor’s and Wall Street Journal / WSJ.com.
Key Wealth, Key Private Client, Key Private Bank, Key Family Wealth, and KeyBank Institutional Advisors are brand names used by KeyBank National Association (KeyBank). Key Wealth and Key Private Client are also brand names used by Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor.
The Key Wealth Institute is comprised of financial professionals representing KeyBank National Association (KeyBank) and certain affiliates, such as Key Investment Services LLC (KIS) and KeyCorp Insurance Agency USA Inc. (KIA).
Any opinions, projections, or recommendations contained herein are subject to change without notice, are those of the individual author(s), and may not necessarily represent the views of KeyBank or any of its subsidiaries or affiliates.
This material presented is for informational purposes only and is not intended to be an offer, recommendation, or solicitation to purchase or sell any security or product or to employ a specific investment or tax planning strategy.
KeyBank, nor its subsidiaries or affiliates, represent, warrant or guarantee that this material is accurate, complete or suitable for any purpose or any investor and it should not be used as a basis for investment or tax planning decisions. It is not to be relied upon or used in substitution for the exercise of independent judgment. It should not be construed as individual tax, legal or financial advice.
The summaries, prices, quotes and/or statistics contained herein have been obtained from sources believed to be reliable but are not necessarily complete and cannot be guaranteed. They are provided for informational purposes only and are not intended to replace any confirmations or statements. Past performance does not guarantee future results.
Brokerage and certain investment advisory services are offered through Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor. Insurance products are offered through KeyCorp Insurance Agency USA, Inc. (KIA) and underwritten by third party insurance carriers not affiliated with KIS. KIS and KIA are affiliates under the common control of KeyCorp. To learn more about KIS’s investment business, as well as our relationship with you, please review our KIS Disclosure page. Check the background of KIS on FINRA's BrokerCheck.
Non-Deposit products are:
NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE • NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY
©2026 KeyCorp®. All rights reserved.
Brian Pietrangelo [00:00:00]
Welcome to the Key Wealth Matters weekly podcast, where we casually ramble on about important topics including the markets, the economy, human ingenuity, and almost anything under the sun, giving you the keys to open doors in the world of investing. Today is Friday, September 4th, 2026. I'm Brian Pietrangelo, and welcome to the podcast. As we head into the weekend, and most of us know we are going into the Labor Day weekend and a little history on Labor Day. It is the first Monday in September and is an annual celebration of the social and economic achievements of American workers. The history is rooted in the late 1800s when labor activists pushed for a federal holiday to recognize the many contributions that workers have made to America's strength, prosperity, and well-being. It also has roots in both New York and in Oregon. And way back on June 28, 1894, President Grover Cleveland signed a law making the first Monday in September of each year a national holiday. Some people mark it as the unofficial end to summer and so we always have an opportunity for picnics, family and friends, barbecues, and everything else American to celebrate the overall contributions of American workers with a day off on the Monday after this weekend. So enjoy. And with that, I would like to introduce our panel of investing experts here to share their insights on this week's market activity and more as they labor on their craft and give us their thoughts on what's going on in the markets. George Mateyo, Chief Investment Officer, Steve Hoedt, Head of Equities, and Pat Grady, Senior Fixed Income Portfolio Manager. As a reminder, a lot of great content is available on key.com slash wealth insights, including updates from our Wealth Institute on many different subjects and especially our Key Questions article series addressing a relevant topic for investors. In addition, if you have any questions or need more information, please reach out to your financial advisor. Taking a look at this week's market and economic activity, we have five key economic updates for you. Two are related to the overall economy and three are related to employment. First up, earlier in the week, we have the reports from the Institute for Supply Management, their PMI report on both the manufacturing index and the non-manufacturing or services index. And for the month of August, both of those reports showed expansion in both of those sectors. So that's good news that the market in terms of the economy in both industrial, manufacturing, and services continues to move at a pretty healthy clip overall. And second, we had the Federal Reserve's Beige Book report, which comes out two weeks in advance of the upcoming Federal Open Market Committee on September 16th. The report showed that economic activity since the month of July had increased modestly and in 10 of the 12 Federal Reserve districts, there was growth in slight to the moderate range with only two districts reporting no change. As we have shared with you in past quarters and in past month, this is pretty good news in that about six months ago it was only about half the districts that were doing well. So seeing that 10 to the 12 showed growth in light or slight to moderate areas is pretty good news as it is emphasized also by the consumer spending in that grew in aggregate on balance with heightened price sensitivity. As we've talked about, inflation continues to be an issue. So there's heightened price sensitivity in overall markets. And switching to the employment data that we received this week, we have #3, which is the job openings that came out of the job openings and labor turnover survey report that showed that the job openings for July of 2026 were very consistent in prior months and we're at about 7.3 million job openings. So not much change there, not much news to report. And 4th, the initial unemployment claims report came out for the week ending August 29th and remained extraordinarily stable at right around that 200,000 mark, which we've been talking about for about over 2 years now. So again, that number at that level remains very stable and is a very favorable sign for the jobs market. And finally, 5th on our list today, just this morning, the Bureau of Labor Statistics released at 8.30 this morning East Coast time, the Employment Situation Report, which has both the new non-farm payrolls, the unemployment rate, and a number of other statistics for the month of August in the employment market. So the new non-farm payroll number came in at plus 162,000 new non-farm payrolls in the United States for the month of August, which was about three times better than the original estimate that people were forecasting. In addition, the prior two months at the normal revision process created an additional 55,000 than originally expected. So all in all, a very robust employment report. We'll talk to George to see how that might affect what's going on in the FOMC world for the meeting coming up in two weeks. In addition, the unemployment rate remained constant from the prior month at 4.1%. So let's turn right to George to get his reaction to those numbers and more regarding our overall economy. George?
George Mateyo [00:05:34]
So all the news this past week, Brian, I think the most notable, of course, was this morning's, and this would be Friday morning, Friday morning's employment report. He was chock pulled a lot of grid stuff. I think by many measures, I think it was pretty much strong across the board, which was kind of a nice welcome change from last month where it was pretty soggy of a report. Strength we saw in major sectors as well as some of the more, the smaller sectors were quite notable. We also saw wages, you know, they didn't get out of control. So it's nice to see that from the inflation perspective, although it probably doesn't make the consumer feel great to see wages a little bit stagnant. But nonetheless, I think the report was pretty solid with the overall numbers of jobs that were added in the past month. And that probably doesn't cool the fears about interest rates and the overall trajectory of the economy, but I don't think it really alters the thinking with respect to what the Fed might do later this month as relates to interest rates. That still seems to be really centered on inflation, which will probably be the topic of next week's conversation. But for now, we saw a pretty strong job report that suggests the economy is doing pretty well. And indeed, I guess if you look at other measures, there's another statistic, a kind of unrelated statistic to the jobs report that looks at the number of people that are actually filing new business applications, meaning these are people that are maybe voluntarily leaving the labor market, they're quitting their jobs. In some cases, maybe they're being forced to quit their jobs. But nonetheless, people that are actually out and about starting new businesses is at an all-time high. And that actually I think is a fairly bullish sign in the sense that most people probably wouldn't be taking that much risk on if they weren't concerned, if they were concerned rather about the economy. So again, that's another data point that suggests the overall economic backdrop is pretty positive. With respect to the situation and the labor market, we saw hospitality jobs actually pick up again. Those were actually a bit weak the prior few months. I'm not sure exactly what drove that in this first month. We'll have to dig into that perhaps a little bit further. And then also, we're starting to see, again, maybe further evidence that AI is having an impact on the labor market because what they call the information sector actually shrunk again for, I think, the third or fourth straight month in a row, which is probably some suggested people moving jobs from certain parts of the economy and using AI to actually fill that void. The flip side, again, I guess this is where I can bring you in the conversation, Steve, has to do with construction, even though that the overall information sector contracted The construction, manufacturing, the hard labor type, if you will, workforce actually rose by a better expected amount. And that's probably data centers as we think about. So I'm sure you've got some thoughts on, Steve, maybe I'll just pass it over you and get your take on how you read that information and what you think about that with respect to data centers in this environment.
Steve Hoedt [00:08:23]
Yeah, look, I think when you look at what's driving the economic growth here domestically over the last few months and clearly the employment numbers, it comes down to the data center build out that's going on to support the AI revolution, for lack of a better way of putting it. I mean, I live in the Saline area in Michigan and we got $43 billion Oracle AI data center going in seven miles down the street in what used to be a farm. So that's happening all over, not just Michigan, but Ohio and other places here in the Midwest, in the north in particular. It's obviously concentrated in the north because our winters are cooler, so it keeps keeps their bills down. So that's the reason for the regional kind of angle on it. But like at the end of the day, you know, this this build out is happening and it's real and it's generating real real economic activity. There is lots of talk and we see it all over the place regarding some kind of political angle on this. I know that there are different groups that want to see this slowed down or want to say no to data centers. But I would tell you that our view is that irrespective of the red team or the blue team being in control, the data center build out is likely going to continue a pace. It's one of the areas where the US has a demonstrable, at least for right now, competitive advantage relative to its global peers. And it doesn't really seem like there's going to be any backing off of that, George.
Brian Pietrangelo [00:10:04]
So Steve, based on that information and along with you, George, what do you think that means for the upcoming Federal Open Market Committee meeting in two weeks in terms of the employment data being fairly strong then and refocusing on inflation in terms of whether there's a proposition they will raise rates or not?
George Mateyo [00:10:19]
Steve, I'm curious to get your take on this, but I kind of think it's still a coin, frankly. I don't know if this report this morning on the labor market, while certainly good and probably stronger than expected, I'm not sure it really offers the calculus that much from what the Fed is thinking. The Fed seems to be pretty squarely focused on inflation, and those reports, as I mentioned earlier, will be out next week. It does probably give some credence that, again, the economy is in a strong enough shape that they can really focus on inflation. Because absent that, if we saw the inverse of what we saw today, there would probably be more focus on the Fed needing to actually pause or even lower rates at some point if we saw a further iteration in the labor market. But we're not getting that, again, We said at the beginning, the overall jobs picture is still pretty upbeat. And that probably allows the Fed to focus on inflation, which is what we focus on too, in the sense that's likely running a bit higher than expected and been more persistent than expected due to a confluence of factors. Steve, any thoughts on that?
Steve Hoedt [00:11:15]
Well, as an equity market guy, I'm always, you know, I always like to stay in my lane, but, you know, I'll go in a pine on the Fed here. Like I look at my work go function on Bloomberg. And as of yesterday, you're right, it was a 50/50 toss up. As of right now, live, it's a 65% probability of a hike. So we've seen a 15% move based off of the employment numbers this morning. We'll get the inflation numbers next week, and if the inflation numbers tilt hot, it's likely we see that move to 75% or higher would be my guess, so we'll see how it goes. I think it's going to be really interesting to count heads on this because if you take the public comments that the Fed heads have made over the last few weeks, you've got a really even split of hawks and doves. It's like six to five right now among the voting members. And what is truly crazy is the one voting member who hasn't said anything is who? Jerome Powell. So here's the former Fed chair who's still a voting governor and he may have the controlling vote on whether a hike happens or not. I mean, the whole dynamic with this is just fascinating to watch. And I think market participants are going to be very, very curious to see how this goes. I hate to use the word unprecedented because we use it way too much, but literally, I don't think we've gone into a Fed meeting where there's been more uncertainty than what we'll have going into that September meeting in another week.
Brian Pietrangelo [00:12:55]
Great, Steve. As the equity guy, pivot back to the equity markets. What did you see this week? We saw a little bit of a decline earlier in the week and then a little bit of a rebound yesterday. What are your thoughts on what's happening underneath the market?
Steve Hoedt [00:13:05]
Brian, I think, you know, as we get into here, I don't like to just to bury this with seasonality and that kind of stuff, because that doesn't always work. So I preface it that way. But, you know, we've had basically the market continuing to hover near all-time highs. We have seen some deterioration and participation under the hood. When I look at an indicator like the percent of the S&P 500 trading above their 50 day, we've seen that fall from 75% two weeks ago to 50% today. So there is some deterioration under the hood as we head into this typically seasonally weak period of September and into mid-October. So, you know, I think the market's behaving exactly as we would think. On the flip side, volatility remains really low. Like there's not not been anything that's been spiking here and credit remains incredibly tight in terms of the BB versus BBB spread, which is our preferred measure to watch the health of the credit market. So there's really nothing under the hood here in the market that says that we're going to have some kind of a massive decline. But it wouldn't surprise us at all right now to just see us either mark time or have a little modest pullback as we head through the month of September, especially with this news driven event likely on the horizon here that people really don't have a great handle on how to price it right now in the market.
Brian Pietrangelo [00:14:32]
Great, thanks, Steve. Speaking of credit, I'd like to bring in Pat Grady, a senior fixed income portfolio manager on our tax exempt desk to talk a little bit about what's happening in the municipal bond market as it is important for a lot of our high net worth listeners and investors. So Pat, let's start off, welcome, and give us an update on what you see generally in overall muni bond market.
Pat Grady [00:14:52]
Yeah, thanks, Brian. Thanks for having me back. So yeah, muni returns in August were mostly negative for the month, but That comes on the heels of a pretty challenging month that we saw in July. The key there was more about curve positioning as we saw flat to slightly positive returns inside of 10 years, but solidly negative returns on the long end of the yield curve. That long end was under pressure from elevated supply that we saw and from inflation concerns, which we saw in the treasury market. Munis tend to move in sympathy with the treasury market, but not in lockstep. And we generally lag any move in rates. And we saw that play out on the long end of our curve in August. But I think the bigger story for munis was the record new issue supply that came to market in August. We generally see between 40 and 45 billion in new issuance per month. And in August, we saw 58 billion in tax exempt issuance come, which is an all time record for a single month. But despite that, the negative returns and the record supply, our market was able to easily digest the influx of paper due to increased demand. The negative returns that we saw July and August kind of led to elevated yields in taxes and paper. And that's really got the attention of retail buyers, which we saw in reports coming out of mutual funds that saw inflows running well above their 52-week averages. Additionally, we see in the summer months, it's a very strong technical period for munis. Some people refer to it as rollover or reinvestment. And it's the seasonal effect that we see The three of the largest months of bonds maturing and coupon payments being made are done in the summer months, which generally get reinvested back into tax exempts, which supports the market. The move higher in rates has also brought long high grade tax exempt paper, cheap to the long end. We're seeing 5% coupons traded at discount, which has traditionally been a level where we see a lot of muni buyers come back to the market. We saw deals priced this past week for high grade AA rated names in 30 years with tax exempt yields around a 510. You know, we put that in context, if you, you know, that's a taxable equivalent yield of 8.5%, meaning you'd have to buy a corporate or treasury above that level. And that 8.5% is roughly 2% higher than the comparable corporate. And then if we turn to calendar September, the outlook changes a bit. We don't have that same reinvestment dollar to support the new issue market. And that market doesn't seem to be slowing down at all. We're seeing another $12 billion set to be priced next week, which is a shortened holiday week with the Labor Day. So it'll be busy, no doubt, for the next few weeks. But keeping a close eye on the Treasury market, any cues that we might see on rate moves out of the Fed.
George Mateyo [00:17:59]
Pat, maybe just trying to tie a little bit about what we were talking earlier with respect to data centers. Are you seeing any pressures amongst municipalities in their budgets because of data centers, because of higher costs, higher electricity, other strains maybe on those budgets that might be too early to-
Pat Grady [00:18:18]
Yeah, not yet, George. It's still very early, as you know, but it's not specifically to data centers, but obviously any kind of funding that comes from the federal government might have a bigger impact, but it's hard to say specifically that's data center related.
George Mateyo [00:18:34]
Thanks.
Brian Pietrangelo [00:18:36]
So in sum, Pat, what would you say in terms of our audience who make that decision between taxable bonds and tax-exempt bonds, where are muni bonds in terms of their attractiveness?
Pat Grady [00:18:44]
Yeah, so we look at relative attractiveness based on a ratio to treasuries. Generally, we see if anything below 60% of a treasury, we would say that munis are rich to the treasuries. And so inside of, say, five years, munis still remain relatively expensive. But as I mentioned, on long end, we're seeing some weakness and we're seeing probably fair value on the long end. But without that technical support that we've seen in the past three months, If we come into next couple weeks of large issuance, we could see those ratios kind of move wider. I would expect that to be the case, but it's hard to say for sure. But absolute levels in munis above a 5% seem to get some attention.
Brian Pietrangelo [00:19:34]
Well, thank you for the conversation today, George, Steve, and Pat. We appreciate your perspectives. And we have a program note that we want to share with you that we have an upcoming national client call on September 29th on what's going on in the midterm election cycle and what it might mean for the markets and investors. So if you are needing an invite for that national call, please reach out to your advisor or your relationship manager to receive the invite. So thanks to our listeners for joining us today and be sure to subscribe to the Key Wealth Matters podcast through your favorite podcast app. As always, past performance is no guarantee of future results and we know your financial situation is personal to you. So reach out to your relationship manager, portfolio strategist, or financial advisor for more information and we'll catch up at the next week to see how the world and the markets have changed and provide those keys to help you navigate your financial journey.
Disclosure [00:20:37]
We gather data and information from specialized sources and financial databases including but not limited to Bloomberg Finance L.P., Bureau of Economic Analysis, Bureau of Labor Statistics, Chicago Board of Exchange (CBOE) Volatility Index (VIX), Dow Jones / Dow Jones Newsplus, FactSet, Federal Reserve and corresponding 12 district banks / Federal Open Market Committee (FOMC), ICE BofA (Bank of America) MOVE Index, Morningstar / Morningstar.com, Standard & Poor’s and Wall Street Journal / WSJ.com.
Key Wealth, Key Private Client, Key Private Bank, Key Family Wealth, and KeyBank Institutional Advisors are brand names used by KeyBank National Association (KeyBank). Key Wealth and Key Private Client are also brand names used by Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor.
The Key Wealth Institute is comprised of financial professionals representing KeyBank National Association (KeyBank) and certain affiliates, such as Key Investment Services LLC (KIS) and KeyCorp Insurance Agency USA Inc. (KIA).
Any opinions, projections, or recommendations contained herein are subject to change without notice, are those of the individual author(s), and may not necessarily represent the views of KeyBank or any of its subsidiaries or affiliates.
This material presented is for informational purposes only and is not intended to be an offer, recommendation, or solicitation to purchase or sell any security or product or to employ a specific investment or tax planning strategy.
KeyBank, nor its subsidiaries or affiliates, represent, warrant or guarantee that this material is accurate, complete or suitable for any purpose or any investor and it should not be used as a basis for investment or tax planning decisions. It is not to be relied upon or used in substitution for the exercise of independent judgment. It should not be construed as individual tax, legal or financial advice.
The summaries, prices, quotes and/or statistics contained herein have been obtained from sources believed to be reliable but are not necessarily complete and cannot be guaranteed. They are provided for informational purposes only and are not intended to replace any confirmations or statements. Past performance does not guarantee future results.
Brokerage and certain investment advisory services are offered through Key Investment Services LLC (KIS), member FINRA/SIPC and SEC-registered investment advisor. Insurance products are offered through KeyCorp Insurance Agency USA, Inc. (KIA) and underwritten by third party insurance carriers not affiliated with KIS. KIS and KIA are affiliates under the common control of KeyCorp. To learn more about KIS’s investment business, as well as our relationship with you, please review our KIS Disclosure page. Check the background of KIS on FINRA's BrokerCheck.
Non-Deposit products are:
NOT FDIC INSURED • NOT BANK GUARANTEED • MAY LOSE VALUE • NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL OR STATE GOVERNMENT AGENCY