Monetary Policy - Beyond Bulls & Bears

Beyond Bulls & Bears

Fixed Income

On My Mind: Catch me if you can—Markets outrun the Fed

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. She shares her latest insights on the policy outlook and the implications for investors.

Sonal Desai, Ph.D. | January 12, 2024

Equity

Notes from the Trading Desk – Europe

Inflation appears to be continuing to cool in the eurozone. Whilst some European Central Bank (ECB) officials welcomed it, they did continue to push the hawkish messaging last week. Comments suggest officials are still committed to a June hike, and there remains a strong possibility of a hike in July too, as they continue to fight inflation.

June 05, 2023

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.

Sonal Desai, Ph.D. | May 10, 2023

Equity

Notes from the Trading Desk – Europe

There is plenty to focus on this week, with some key macro data coming out (US CPI), the US debt ceiling in focus (Biden-Congress talks), and the Bank of England decision (Thursday). In addition, the concerns around the US regional banks will no doubt remain a driver for markets.

May 09, 2023

Equity

Notes from the Trading Desk – Europe

Corporate earnings will continue to dominate this week, with tech heavyweights a focus in the United States. Microsoft. A large number of European and Asian companies also report earnings this week.

April 24, 2023

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.

Stephen H. Dover, CFA | April 19, 2023

Equity

Notes from the Trading Desk – Europe

Franklin Templeton’s Notes from the Trading Desk offers a weekly overview of what our professional traders and analysts are watching in the markets. As part of Templeton Global Equity Group, the European equity desk is manned by a team of professionals based in Edinburgh, Scotland, whose job it is to monitor the markets around the world. Their views are theirs alone and are not intended to be construed as investment advice.

March 20, 2023

Equity

Notes from the Trading Desk – Europe

This week, investor focus is firmly on central bank meetings, with the Federal Reserve’s policy meeting on Wednesday, and Bank of England and European Central Bank on Thursday. These meetings face greater scrutiny, given we have seen signs of inflation peaking in several regions, leading to hopes we may soon see a tilt from some central banks.

January 30, 2023

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.

Sonal Desai, Ph.D. | November 02, 2022

Equity

Notes from the Trading Desk – Europe

Pressures on the UK consumer remain front and centre. There is a focus on the extreme moves in mortgage rates and the potential impact this will have on the housing market and consumer spending. The government has brought forward its fiscal statement to 31 October in order to shore up market confidence.

October 10, 2022

Fixed Income

On my mind: The Fed—do you hear me now?

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. Restoring price stability will require tight monetary policy for some time, he said, and the Fed will not waver when the labor market starts feeling the pain. Markets have taken notice, but will test the Fed’s resolve again, making for a volatile adjustment process in asset prices. Our Fixed Income CIO Sonal Desai shares her thoughts:

Sonal Desai, Ph.D. | August 26, 2022

Fixed Income

On my mind: Are we there yet?

Are we there yet? Fed Chairman Jerome Powell hedged himself carefully at the July press conference; markets heard it as confirming expectations that we are closing in on the terminal rate and that the Fed will likely start cutting again as early as March of next year. Our Fixed Income CIO Sonal Desai is not so sure—here are her thoughts:

Sonal Desai, Ph.D. | July 27, 2022

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