Bond Titan Says Betting That Fed Hikes Are Over Is ‘Very Misguided'
- Templeton CIO forecasts two interest-rate increases this year
- Global Bond Fund is heavily positioned for Treasury sell-off
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A $150 billion debt investor warns markets are getting ahead of themselves with big bets that the Federal Reserve is taking an extended pause in raising interest rates.
“The market’s assumption that the Fed will not raise interest rates at all this year is very misguided, against a background of continued economic strength,” Sonal Desai, chief investment officer for the fixed-income group at Franklin Templeton, wrote in a blog post this week on the heels of the Fed’s dovish shift. “Expectations that the U.S. economic cycle is coming to an end are highly overstated.”