Speaker · Updated
Collin Martin: latest market views
Charles Schwab
Summary
Collin Martin, CFA, is Head of Fixed Income Research and Strategy at the Schwab Center for Financial Research, focusing on taxable credit markets, and cohosts the On Investing podcast; he joined Schwab in 2012 after working as a fixed income strategist at Morgan Stanley Smith Barney.
Chorus has 13 views from Collin Martin across 2 episodes on On Investing (Charles Schwab) since October 23, 2026. Their latest calls: bearish on CoreWeave.
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Their latest bullish or bearish call on each company.
- CoreWeaveBearish ·
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The latest views
Newest first. Every quote is checked against the episode's transcript.
Warsh's press conference was hawkish, signalling more rate hikes despite the hold.
Martin reads Warsh's press conference as hawkish, which leans toward more hikes coming, even though the Fed held. Warsh said inflation is still too high and that financial conditions have tightened but are not tight. Martin notes the statement described the economy as strong and said the committee needs more data. He also sees a possible patient approach, since inflation expectations are described as anchored, so the Fed may not need to act as aggressively as markets expect. Short-term Treasury yields fell after the meeting, which he links to that patience.
“he made it clear that inflation's still too high, and he said that financial conditions have tightened but aren't tight. So, you know, that to me is hawkish or leans to the idea that more hikes are coming.”at 3:24
On Investing (Charles Schwab): The Fed Holds, but the Pressure Builds ·
Long-term yields may carry a rising term premium because the Fed's direction is unclear.
The 10-year Treasury yield rose after the meeting. Martin suspects this reflects an uncertainty premium. The term premium is the extra yield investors earn for holding longer bonds in case short-term rate expectations do not play out. Without clear guidance on where the Fed is heading, investors may demand more term premium. That would show up in higher long-term yields as investors struggle to forecast policy over the coming months or quarters. He presents this as a possible explanation, not a settled conclusion.
“We don't really know which way Kevin [Warsh] is leaning right now. So maybe you start to see more of a term premium show up in higher long term yields just because we don't really know what's happening or what to expect over the next few months or quarters.”at 7:06
On Investing (Charles Schwab): The Fed Holds, but the Pressure Builds ·
Credit markets call for selectivity: record issuance is happening as borrowing costs and spreads rise.
Investment-grade corporate bond issuance hit a new annual record this October, beating the 2020 high. That high came when the Fed had cut rates to zero and set up facilities to buy corporate bonds, so companies rushed to term out cheap debt. Now borrowing costs are elevated and spreads are rising. In a zero-rate world, weaker 'zombie' companies could keep borrowing cheaply, but that is no longer true. The high-yield market is largely shut after concerns from a few weeks earlier. High-quality issuers can still borrow, but low-single-A and triple-B issuers and sub-investment-grade companies face more trouble. Martin expects the credit headlines to continue and says the market cannot be painted with a broad brush.
“Now fast forward to today and we just hit a new record, and this is an environment where borrowing costs are elevated and spreads are rising, and that matters. Not every company can succeed in that environment.”at 11:52
On Investing (Charles Schwab): The Fed Holds, but the Pressure Builds ·
Big companies, especially in tech and the data center build-out, have strong fundamentals with healthy coverage and leverage.
Martin says large companies, especially big tech and firms in the data center build-out, have pretty strong corporate fundamentals. Interest coverage ratios are strong. Leverage, measured as debt relative to earnings, is acceptable. He still expects pockets of stress. Rising rates hit the most indebted companies and those with volatile cash flows. Overall he sees corporate fundamentals as relatively healthy, with selectivity still needed.
“On the bright side, we think that big companies and especially big companies out of tech and out of the data center build out, corporate fundamentals are pretty strong. ... Leverage is okay, debt relative to earnings.”at 13:04
On Investing (Charles Schwab): The Fed Holds, but the Pressure Builds ·
Labor market is steady and balanced, and slowing wage growth would help the inflation outlook.
Unemployment has held in a tight range for about 20 straight months, at 4.2% in September, and Martin expects it to stay between 4% and 4.5%. He calls that good news, since it remains low by historical standards. He expects year-over-year average hourly earnings growth of 2.9%, which would be the first reading below 3% since May 2021. Slower earnings growth would help the inflation outlook and could limit price increases if it reduces consumer demand. The JOLTS job openings-to-unemployed ratio near 1.0 suggests the labor market is relatively balanced.
“On a year over year basis, they're expected to come in at 2.9%. That would mark the first time below 3% since May 2021, and that'll be good news for the inflation outlook.”at 14:55
On Investing (Charles Schwab): The Fed Holds, but the Pressure Builds ·
Reducing Treasury supply should pull long-term yields lower, and Bessent appears to favour that route.
Martin says Treasury Secretary Scott Bessent seems clearly to want lower rates. Bessent raised the Treasury buyback operation a few months ago. Martin argues that cutting supply while demand stays constant should push long-term yields down. He does not expect much change at the upcoming quarterly refunding announcement, which covers coupon issuance versus bills. He says a surprise shift in issuance mix could move yields accordingly. The view is mechanical and based on supply and demand.
“And a way to bring long term yields down is to reduce the supply because the laws of supply and demand suggest if you reduce the supply and you keep demand constant, that should pull yields lower.”at 16:53
On Investing (Charles Schwab): The Fed Holds, but the Pressure Builds ·
Bonds did their job last week, rallying as stocks dipped and showing their diversification value.
Martin points to last week's price action. Yields fell and bond values rose as the stock market declined a little. Bond prices and yields move in opposite directions, so the rally showed the price stability, capital preservation and diversification benefits bonds are supposed to provide. He notes stocks were still near all-time highs, so the decline was modest. He treats this as a calming signal for investors worried about bonds and stocks falling together.
“arguably, bonds did exactly what they're supposed to do, in that yields fell, their values rose because bond prices and yields move in opposite directions as the stock market declined a little bit.”at 3:15
On Investing (Charles Schwab): Can Bonds Still Do Their Job? ·
Current Treasury and aggregate-bond yields are attractive, and income is the core source of bond returns.
Martin argues that even if yields hold in a tight range for a long time, bonds still generate income, which is the core value of bond investments. A strategy offering around a 5% yield can deliver steady returns if values hold steady. He says the current level of yields is very attractive, so the focus should be on income payments. He hedges that fluctuations can happen and that this is not a prediction of any specific outcome.
“we're at a level right now where yields we think are very attractive and focus on those income payments.”at 6:48
On Investing (Charles Schwab): Can Bonds Still Do Their Job? ·
CoreWeaveBearish
CoreWeave's junk rating points to elevated credit risk and rate sensitivity, though Martin does not cover it.
Martin says CoreWeave is a junk-rated issuer, rated double B or below. Such issuers usually already have high leverage and may have volatile cash flows. Low ratings usually come with more volatility and greater sensitivity to rising rates, which is the current environment. He stresses he is not a bond analyst on this issuer and is speaking objectively about the rating category, so the view is a risk warning rather than a firm call.
“and with low ratings come usually more volatility. They might be more sensitive to rising interest rates, which is the environment we're seeing right now.”at 13:09
On Investing (Charles Schwab): Can Bonds Still Do Their Job? ·
AI infrastructure & data centers
Hyperscalers' heavy bond issuance is manageable, since their debt relative to earnings is not concerning.
Martin argues that credit risk must be assessed issuer by issuer, not with a broad brush. Hyperscalers are investment-grade issuers with diversified business lines. Their debt relative to earnings is not at concerning levels, even though they have issued a large amount of debt to fund AI spending. This contrasts with sub-investment-grade neoclouds, which carry more leverage and volatility.
“for a lot of the so called hyperscalers, those are investment grade issuers that have diversified business lines and their debt relative to their earnings aren't really at concerning levels even though they've issued so much.”at 13:25
On Investing (Charles Schwab): Can Bonds Still Do Their Job? ·
Mortgage rates jumped sharply on top of already elevated levels, which will likely weigh on housing data.
Martin says mortgage rates were already elevated relative to the past fifteen years. They picked up recently and then rose sharply. He expects that move to flow through to the housing data coming out in the weeks ahead. Liz Ann Sonders also flagged home sales as something to watch because of the rise in mortgage rates. The view is that housing activity will be pressured by the rate move.
“We've seen this big jump in mortgage rates. So mortgage rates had already kind of been elevated... They picked up a little bit recently, then they kind of turbocharged even higher.”at 15:16
On Investing (Charles Schwab): Can Bonds Still Do Their Job? ·
Core PCE is expected to rise 0.3% month over month, which Martin sees as too hot for the Fed.
Martin says the PCE report is the key inflation measure for Fed policy and that core monthly readings are the focus. Expectations are for core PCE to rise 0.3% month over month, which he thinks is a little too hot for officials. He also watches the diffusion index, the share of subcomponents rising at a 3% annualized rate, to see whether inflation is broadening. Upside surprises or breadth that does not improve would raise the odds of more rate hikes.
“Expectations right now are for core PCE to rise by 0.3% month over month. That'll be a little bit too hot, I think, for officials.”at 17:42
On Investing (Charles Schwab): Can Bonds Still Do Their Job? ·
Fed holds next week, but Martin expects hikes by December and another in early 2027.
Martin expects a pause at the upcoming FOMC meeting, with the policy rate in the 3.75% to 4% area. He still expects a hike by year-end in December and another in early 2027. The reasoning is that inflation has not cooled, the outlook has not improved, and the Fed hiked last month. He expects a few hawkish voters to dissent in favor of a hike. If upside inflation surprises continue, or breadth in price increases stays elevated, the likelihood of more hikes should be high.
“So even though we expect a pause next week, we do expect a hike by year end in December and then another one sometime in early twenty twenty seven.”at 18:13
On Investing (Charles Schwab): Can Bonds Still Do Their Job? ·
Shows
- On Investing (Charles Schwab) · 2 episodes
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