"Don't Pick Up Nickels in Front of a Steamroller:" Warning for Fixed Income Investors

• Fed meeting minutes on Wednesday are key for insights into future rate hikes, with expectations for at least one more hike this year.
• Inflation (PCE/CPI) remains a primary concern for the Fed, running above target for over five years.
• Municipal bonds offer attractive valuations and yields, especially for higher tax bracket investors, following a challenging September.
• Credit spreads are widening, signaling a 'yellow' warning, but high-yield and investment-grade corporate bonds present attractive absolute yields for long-term investors with higher risk tolerance.

Cooper Howard from Schwab Center for Financial Research discusses the fixed income outlook, noting a light week for economic data but continued Fed focus on inflation. He advises caution on extending duration due to market volatility but highlights attractive opportunities in municipal bonds and corporate bonds, particularly for income-oriented investors.