Beyond Bulls & Bears

On My Mind: The Fed fights inflation, the markets fight the Fed
Fixed Income

On My Mind: The Fed fights inflation, the markets fight the Fed

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.

Quick Thoughts: The Fed—quantitative tightening or quantitative easing?
Perspectives

Quick Thoughts: The Fed—quantitative tightening or quantitative easing?

Can the Fed balance its objective of fighting inflation—and help save banks in turmoil? Stephen Dover, Head of Franklin Templeton Institute, opines.

On my mind: A different kind of pivot
Fixed Income

On my mind: A different kind of pivot

Markets hoped for a dovish Federal Reserve “pivot,” but got a hawkish surprise instead. Brace for more volatility as the yield curve adjusts, warns Franklin Templeton Fixed Income CIO Sonal Desai. She sees the fixed income outlook as more constructive moving further forward in 2023.

On my mind: Staying on message
Fixed Income

On my mind: Staying on message

The Fed delivered another 75 bps rate hike and reiterated its Jackson Hole message: reducing inflation is now its one and only priority. But the Fed's forecasts still seem too optimistic, and this could feed extended uncertainty and volatility in markets. Our Fixed Income CIO Sonal Desai shares her thoughts.

On my mind: The Fed capitulates
Fixed Income

On my mind: The Fed capitulates

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. It also de facto abandoned forward guidance. It was a reminder that economic data eventually rule the day, says Franklin Templeton Fixed Income CIO Sonal Desai. She argues this is a welcome but only partial move to a more realistic stance, and discusses why further hawkish surprises likely lie ahead.

On My Mind: Fed and Inflation: You Can’t Always Get What You Want
Fixed Income

On My Mind: Fed and Inflation: You Can’t Always Get What You Want

The Fed seems to have been caught by surprise by its own policy and says this is not the inflation it was looking for. Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income, shares her thoughts on why inflation should not have come as a surprise and why investors need to brace for higher volatility as the Fed adjusts its policy stance.

On My Mind: Inflation: Don’t You (Forget About Me)
Fixed Income

On My Mind: Inflation: Don’t You (Forget About Me)

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. With consumer inflation at multi-decade highs and COVID-19 risks still alive, what’s next for the monetary policy response—and market implications—as we move into 2022? Our Fixed Income CIO Sonal Desai shares her views.

On My Mind: Leaving QE, Never Easy
Fixed Income

On My Mind: Leaving QE, Never Easy

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. The robust recovery, high inflation and record asset prices call for the Fed to wind down an extraordinary monetary easing that is also exacerbating economic inequality. But leaving QE isn’t easy, as financial markets have become overly dependent on Fed support. In her latest “On My Mind,” our Fixed Income CIO Sonal Desai discusses the Fed’s challenges and what they mean for investors.

On My Mind – Inflation: Nothing to see here. Really?
Fixed Income

On My Mind – Inflation: Nothing to see here. Really?

Prices continue to climb, with the US CPI rising in June by the most since 2008. Financial markets seem to be unfazed, but businesses and consumers appear considerably less sanguine. In her latest “On My Mind,” our Fixed Income CIO Sonal Desai discusses why inflation may be less “transitory” than many expect.

On My Mind – The Fed’s Last Call for the Punchbowl?
Fixed Income

On My Mind – The Fed’s Last Call for the Punchbowl?

The Fed now acknowledges inflation risks are to the upside. With high uncertainty on the inflation and employment outlook, adjusting its exceptionally loose monetary stance at the right time and pace become a very difficult high-wire act. In the latest edition of our Fixed Income CIO Sonal Desai’s “On My Mind” series, she discusses the Fed’s challenge, and where she is finding opportunities in the market.