Current Volatility

Jeff Schulze, Head of Economic and Market Strategy at ClearBridge Investments, discusses key spending, employment and other policy factors he is following as we look forward to 2026.

ClearBridge Investments believes the probability of a pickup in layoffs tipping the economy into a recession remains low. They remain confident that US economic growth will continue to moderate but stay on a healthy trajectory.

ClearBridge Investments: We believe the underlying health of the labor market remains solid, despite the recent shocks. As the impacts from these shocks fade, the resilience of the US economy will once again shine through as we move into 2026 in the form of a pickup in job creation.

ClearBridge Investments: With clarity on tariffs emerging, a major source of macro and market uncertainty is waning. Combined with a tax and fiscal boost from new legislation, corporate animal spirits are poised to pick up.

ClearBridge Investments believes periods of substantial uncertainty could offer an opportunity for individuals and professionals alike to gain an investment edge by lengthening their time horizon.

ClearBridge Investments believes the degree to which a recent plunge in “soft” survey data, which typically occurs during recessions, translates into weakness in actual “hard” data in the coming months will be crucial in determining the health of the economy.

Is it time to make changes to portfolio allocations due to the current equity market volatility? The Franklin Templeton Investment Solutions team discusses the factors driving the recent selloff, the probability of a recession in the United States and what their strategy is given market conditions.

Franklin Templeton Fixed Income suggests that emerging market debt investors need to be aware of the underlying spread dynamics that drive overall spread moves. In this paper, they consider those factors and the opportunities available.

Financial markets seem to have returned to trying to time a dovish Federal Reserve turn, but Franklin Templeton Fixed Income CIO Sonal Desai says with a tight labor market and inflation running at 5%-6%—don’t bank on it.

Does the latest US data confirm the battle against inflation has already been won? Franklin Templeton Fixed Income CIO Sonal Desai says markets are overly optimistic.

We are witnessing a major shift in the fixed income investment environment. Franklin Templeton Fixed Income CIO Sonal Desai assesses the role of global and country-specific driving forces, and shares her views on the investment opportunities ahead.

Fed Chairman Powell delivered a forceful and unequivocal message today at Jackson Hole, pushing back against market expectations of an early pivot back to rate cuts. Restoring price stability will require tight monetary policy for some time, he said, and the Fed will not waver when the labor market starts feeling the pain. Markets have taken notice, but will test the Fed’s resolve again, making for a volatile adjustment process in asset prices. Our Fixed Income CIO Sonal Desai shares her thoughts.

The Fed raised interest rates by 75 basis points in its June policy meeting, acknowledging continued upside surprises on inflation, inflation expectations and wage growth. It also de facto abandoned forward guidance.

The Fed struck a hawkish tone at its latest meeting, but Franklin Templeton Fixed Income Chief Investment Officer Sonal Desai believes it still underestimates how far rates will likely need to rise—and so do the markets. She discusses what it will take to get inflation back under control, and how fixed income investors can position for the volatile rising-rate environment ahead.

With the war taking a tragic toll in Ukraine and triggering a major shift in the geopolitical and economic order, Franklin Templeton Fixed Income CIO Sonal Desai discusses the implications for the US dollar’s status as dominant reserve currency, and for the pace of the energy transition.