Franklin Templeton Investments CEO Jenny Johnson believes that the policies of US President Donald Trump will provide a boost to both the US economy and financial markets, Bloomberg reports.
Speaking at the World Economic Forum in Davos, Johnson stated that Trump’s focus on deregulation, proposed spending policies, and tax cuts will contribute to significant economic growth.
“I think the view is that he’s going to be good for the economy and that therefore is good for both public and private markets,” Johnson said.
Franklin Templeton, which oversees around $1.7 trillion in assets, is signaling a positive outlook on the potential impact of the Trump administration.
Regarding Trump’s threats to impose tariffs on Mexico and Canada, Johnson suggested that his approach is often a negotiating tactic, noting that the president typically follows up broad statements with a more practical approach. This suggests that while initial pronouncements may cause concern, the ultimate outcome could be less drastic.
Johnson also anticipates a shift in monetary policy, predicting that the Federal Reserve will “pause right now” on its rate-cutting path to assess the impact of Trump’s policies. She expects the US 10-year Treasury yield to reach around 5% by the end of the year.
Furthermore, Johnson highlighted the cryptocurrency sector as one that will be heavily influenced by Trump’s policies, predicting a convergence between traditional finance and crypto.
In the private markets, Johnson sees significant opportunities in secondary private equity and real estate debt. She pointed out that about $150 billion is currently deployed in secondary private equity, often at substantial discounts. She also noted that the reduced lending capacity of regional banks in the US has created opportunities for private-credit managers with expertise in the real estate sector.
