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US Fed rate action will not impact India: Sonal Desai of Franklin Templeton

The markets expect the US Fed to stop hiking interest rates and start reducing them as early as 2023. However, Sonal Desai of Franklin Templeton Fixed Income global says that’s not going to happen and the US Fed will cut rates only in 2024.

November 22, 2022 / 08:09 AM IST
Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income

Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income

Indian investors are typically lured towards equity rather than debt or fixed-income securities. In developed countries such as the US, fixed income is big business. Almost 40 percent of Franklin Templeton’s assets under management worldwide are in fixed income securities, 32-33 percent in equities, about 18 percent in alternative assets, and 10 percent in multi-asset funds.

Sonal Desai is chief investment officer at Franklin Templeton Fixed Income. The Indian-born Desai oversees the firm’s fixed income strategies. Desai joined as director of research for Templeton Global Macro in 2009 and she became the fund house’s global head of fixed income in 2018.

Today, she oversees a global fixed income team of more than 150 portfolio managers, analysts and traders managing over $132 billion in fixed income assets as of September 30.

In a conversation with Moneycontrol’s Kayezad E. Adajania, she said India is relatively un-correlated from the US markets and Fed rate hikes and is more impacted by oil prices. Edited excerpts: