

Investors' Big Question: Is the Fed Done Cutting Interest Rates?
8 snips Jan 26, 2025
Sonal Desai, Chief Investment Officer at Franklin Templeton Fixed Income, joins the discussion on the future of interest rates. She shares her insights on whether the Federal Reserve is done cutting rates and what indicators she'll monitor in upcoming speeches. The conversation also dives into the bond market dynamics and the implications of tariffs on investor behavior. With a keen eye on economic forecasts, Desai illuminates the challenges and opportunities facing investors in this uncertain landscape.
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Sonal's Accurate Prediction
- Sonal Desai's view on interest rates staying higher has proven correct so far.
- She was pessimistic about inflation and optimistic about U.S. growth.
Neutral Interest Rate
- The Fed's neutral rate is around 4%, matching current rates.
- Further rate cuts might be unnecessary given the strong economy.
Imprudent Rate Cut
- The Fed's 50 basis point rate cut was unnecessary and imprudent.
- They should wait and see before further cuts, says Sonal Desai.