Franklin Templeton’s bond chief says expects at least two Fed rate hikes in 2019

(Reuters) – The U.S. Federal Reserve will likely raise at least twice in 2019 against a backdrop of continued economic strength as opposed to “misguided” market assumptions of no hikes this year, according to Franklin Templeton’s head of bonds.

“I would still anticipate that it will deliver at least two more rate hikes this year. I believe that 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,” said Sonal Desai, chief investment officer for the Fixed Income Group at Franklin Templeton.

She said in a note that the $750 billion fund manager’s view on China has become somewhat more pessimistic than it has been historically.

“In my view, the global outlook is a bit more at risk from China today than it was say two or three years ago. This is something which we will be monitoring extremely carefully,” she said.

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