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On My Mind: (r)-stargazing
Fixed Income

On My Mind: (r)-stargazing

Franklin Templeton Fixed Income CIO Sonal Desai discusses where she thinks the real policy rate lies in the United States and how this informs her outlook for US Treasury yields over the medium to long term.

Sonal Desai, Ph.D. | June 06, 2024
On My Mind: The twin roots of rising rates
Fixed Income

On My Mind: The twin roots of rising rates

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.

Sonal Desai, Ph.D. | May 22, 2024
On My Mind: The Fed, the Treasury and a fistful of dollars
Fixed Income

On My Mind: The Fed, the Treasury and a fistful of dollars

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.

Sonal Desai, Ph.D. | May 06, 2024
On My Mind: Fed Chair Powell—I still haven’t found what I’m looking for…
Fixed Income

On My Mind: Fed Chair Powell—I still haven’t found what I’m looking for…

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. In her view, getting inflation down to 2% will be harder and take longer than Federal Reserve Chair Jerome Powell expects, and she predicts that rate cuts will come only later—in the second half of the year.

Sonal Desai, Ph.D. | March 22, 2024
On My Mind: Inflation—The Fed’s sticky wicket
Fixed Income

On My Mind: Inflation—The Fed’s sticky wicket

Franklin Fixed Income CIO Sonal Desai discusses why the January inflation print confirms that the “last mile” of disinflation may prove to be a lot harder than markets expect, and investors should brace for more volatility and a possible move of 10-year Treasury yields back in the 4.25%-4.50% range.

Sonal Desai, Ph.D. | February 14, 2024
On My Mind: Productivity boom—new dawn or false dawn?
Fixed Income

On My Mind: Productivity boom—new dawn or false dawn?

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.

Sonal Desai, Ph.D. | February 07, 2024
On My Mind: Catch me if you can—Markets outrun the Fed
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
On My Mind: Miracle on 20th Street
Fixed Income

On My Mind: Miracle on 20th Street

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.

Sonal Desai, Ph.D. | December 14, 2023
On My Mind: The Fed and markets—Same as it ever was
Fixed Income

On My Mind: The Fed and markets—Same as it ever was

A dovish nudge in the Federal Reserve's (Fed’s) November press conference pushed markets to again price a significant monetary easing as early as mid-2024. 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.

Sonal Desai, Ph.D. | November 06, 2023
On My Mind: Restrictive? We’ll know it when we see it.
Fixed Income

On My Mind: Restrictive? We’ll know it when we see it.

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

Sonal Desai, Ph.D. | September 21, 2023
On My Mind: The structural shift that wasn’t
Fixed Income

On My Mind: The structural shift that wasn’t

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

Sonal Desai, Ph.D. | August 23, 2023
On My Mind: Debt ceiling to markets—I’ll be back!
Fixed Income

On My Mind: Debt ceiling to markets—I’ll be back!

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.

Sonal Desai, Ph.D. | June 06, 2023