Franklin Templeton Fixed Income CIO Sonal Desai discusses why rising investment and persistently loose US fiscal policy are simultaneously pushing in the direction of higher long-term real interest rates.
Franklin Templeton Fixed Income CIO Sonal Desai discusses why persistently loose fiscal policy, relentless price pressures and resilient economic growth may cause a problem for the US Federal Reserve—and explains the implications for bond yields.
Franklin Templeton Fixed Income CIO Sonal Desai believes that the Fed's March policy meeting was not as dovish as some commentators and market participants have claimed, and that the Fed is still pragmatic and cautious about inflation and rate cuts.
While central banks in the United States and eurozone are gauging when to embark on monetary easing, the Bank of Japan will likely hike in April. All three will continue to monitor wages (and their impact on services inflation) and the balance of risks to economic growth.
January’s US inflation print came as an unwelcome spoiler for financial markets, dealing what looks like the final blow to hopes of a March interest-rate cut, sending bond yields back up and triggering a major one-day correction in equities.
Franklin Fixed Income CIO Sonal Desai discusses why the recent acceleration in productivity growth might prove durable, leading to higher potential returns on real investment and a higher equilibrium interest rate.
The Federal Reserve has fueled market conviction that the good old days of extremely low interest rates and abundant liquidity are soon to return. Our Franklin Templeton Fixed Income CIO Sonal Desai sees this reaction as an excess of dovish enthusiasm that sets the stage for more volatility.
Markets cheered a “dovish” December Federal Reserve meeting, seen as an early gift to investors. But has the battle against inflation been won? Franklin Templeton Fixed Income CIO Sonal Desai weighs in.
Our Franklin Templeton Fixed Income CIO Sonal Desai sees this market reaction as an excess of exuberance that sets the stage for more volatility. She shares her latest insights on the policy outlook and the implications for investors.
The Fed sent a strong signal that interest rates will remain higher for longer, as our Franklin Templeton Fixed Income CIO Sonal Desai has long predicted. The Fed also started to acknowledge that the natural real rate of interest is higher than it thought.
Markets seem to be coming around to our Franklin Templeton Fixed Income CIO Sonal Desai’s view that the Fed will have to keep interest rates higher for longer, but now runaway fiscal deficits pose further upside risk to yields in the long term, she warns.
The debt ceiling crisis has been averted—but this short-term relief might come at the cost of greater future peril. Franklin Templeton Fixed Income CIO Sonal Desai analyzes the debt-ceiling resolution and delves into the potential longer-term risks that rising public debt poses to financial markets.
Markets want to believe policy interest rates will soon fall—but inflation and growth data tell a very different story, argues Franklin Templeton Fixed Income CIO Sonal Desai.
Financial markets seem to have returned to trying to time a dovish Federal Reserve turn, but Franklin Templeton Fixed Income CIO Sonal Desai says with a tight labor market and inflation running at 5%-6%—don’t bank on it.
Markets hoped for a dovish Federal Reserve “pivot,” but got a hawkish surprise instead.
Federal Reserve Chairman Powell delivered another forceful message to markets that an early pivot back to rate cuts will not happen until inflation is under control.
Fed Chairman Powell delivered a forceful and unequivocal message today at Jackson Hole, pushing back against market expectations of an early pivot back to rate cuts.
The Fed raised interest rates by 75 basis points in its June policy meeting, acknowledging continued upside surprises on inflation, inflation expectations and wage growth.
Investors’ expectations that interest rates will not rise much may be very misguided.
Are the reserve banks too slow in tackling inflation? Will inflation level off by itself? Will rising rates cause a recession?
Are the reserve banks too slow in tackling inflation? Will inflation level off by itself?
The Fed struck a hawkish tone at its latest meeting, but Franklin Templeton Fixed Income Chief Investment Officer Sonal Desai believes it still underestimates how far rates will likely need to rise—and so do the markets.
Russia’s invasion of Ukraine has ramifications for global inflation and growth, according to Franklin Templeton Fixed Income.
With inflation running at multi-decade highs, major central banks get ready to tighten monetary policy.
Disagreements about the outlook for inflation in the new year and beyond continue.
The Fed seems to have been caught by surprise by its own policy and says this is not the inflation it was looking for.
The US Federal Reserve finally acknowledged inflation is not a “transitory” problem and signaled a greater degree of concern; but investors seem to think that the Fed will blink when markets balk.
Of all recent economic trends, sluggish employment growth is perhaps the most important for investors to watch, says Franklin Templeton Fixed Income CIO Sonal Desai. She outlines why the labor market has been sluggish, and why it may remain that way for some time.
Rising inflation globally raises the question of whether inflation is persistent versus transitory, driving debate among our investment managers. Our Stephen Dover, Head of the Franklin Templeton Investment Institute, recently discussed economic growth, interest rates, and inflation during a roundtable,
This year’s annual economic policy symposium in Jackson Hole opens the six months that will likely define the legacy of the Powell Fed’s first term.
Prices continue to climb, with the US CPI rising in June by the most since 2008.
The Fed now acknowledges inflation risks are to the upside.
While a global recovery has now become the base case for financial markets, differences between countries and regions on the path toward normalcy are significant and seem set to widen.
Our Fixed Income CIO Sonal Desai has been ahead of the curve in flagging the risks of inflation and rising rates that have now entered the mainstream debate.
Our Fixed Income CIO Sonal Desai shares her investment views and strategies for the post-pandemic recovery. She explains why inflation looks likely to gain steam, and how the balance of fundamentals and valuations become especially crucial today when looking for attractive returns in fixed income.
The Franklin Templeton–Gallup Economics of Recovery Study has heralded some interesting results in regard to the attitudes and behavior of Americans in response to the ongoing pandemic—and what developments could change both.
In our latest Election Pulse, our Head of Equities Stephen Dover is joined by Franklin Templeton Fixed Income CIO Sonal Desai and Gallup’s Jonathan Rothwell to discuss survey findings on COVID-19 and its impact on the consumer. They discuss attitudes about vaccines, mask-wearing, and where they think the research may lead them post-election.
While the US economy has been staging a strong recovery from the COVID-19 pandemic, the challenge is far from over, says Franklin Templeton Fixed Income CIO Sonal Desai. She says the tug of war between the virus and the economy seems likely to continue until an effective vaccine is made available at scale.
As economies reopen from COVID-19 lockdowns, there have been fundamental shifts to daily life and work, as well as the investment landscape.
The Franklin Templeton-Gallup Economics of Recovery Study has unveiled many insights about US consumer attitudes and behavior in the wake of COVID-19. Our Fixed Income CIO Sonal Desai examines findings from the survey’s second pulse, including encouraging signs confidence has found a floor.
Our Fixed Income CIO Sonal Desai unveils the first insights from the new Franklin Templeton–Gallup research project on the behavioral response to the COVID-19 pandemic and implications for the recovery.
The unprecedented nature of the COVID-19 economic disruption has made traditional gauges of economic developments woefully inadequate, says our Fixed Income CIO Sonal Desai. She highlights the need to look deeper into new ways of examining the path toward recovery...
The global market outlook is already hazy in light of the COVID-19 pandemic, and the upcoming US presidential election adds another layer of uncertainty.
Given fears of a COVID-19 resurgence and US election uncertainties looming, many investors are wondering what comes next for policymakers in terms of supporting the economy. Our Fixed Income CIO Sonal Desai weighs in on the possibility of negative US interest rates or other measures.
After the shock of COVID-19, when will the global economy return to a sense of normalcy? Franklin Templeton Fixed Income CIO Sonal Desai examines some key economic activity indicators in the wake of the pandemic. She shares data on recent changes in US consumer behavior which seem to signal people are eager to go back to normal life.
COVID-19 has taken a toll on human lives as well as the global economy, with the latest US employment figures revealing a shocking number of job losses in April.
With recent data showing a coronavirus-driven recession in the United States appears inevitable, the question for many investors is how long it will last. Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income, weighs in on the differences between this one and other recessionary periods—and whether policymakers can engineer a recovery.
The US Federal Reserve continues to use whatever tools it can to help combat economic fallout from the coronavirus. Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income, calls its latest response “a whole new level” of stimulus.
The US Federal Reserve took dramatic action on Sunday, March 15, slashing interest rates and relaunching quantitative easing and other measures to battle the economic impacts of the coronavirus.
