Bull markets are never linear, says Franklin Templeton CEO

Market & Economic Outlook - The market initially reacted positively to the Fed's announcements, potentially anticipating an end to balance sheet runoff [1][2] - The Dallas Fed suggests the equilibrium for job creation is closer to 30,000 per month post-COVID, considering factors like reduced labor participation and immigration [3] - Increased productivity (up 1% to 2.5% from a decade average of 1.5%) means fewer workers are needed to maintain the same output [4] - Tariffs are considered inflationary, but upcoming tax refunds of $150 billion next February could stimulate the economy [5] - The market may be overly optimistic about the extent of interest rate cuts (100-125 basis points) in the coming year [6] - US deficits are a concern, requiring a strong economy to manage, and gold is seen as a hedge against potential inflation [10][11] AI & Technology - The AI market is in early stages, particularly regarding infrastructure investments in power and grid, and companies are primarily using AI to improve existing processes [8][9] - The full impact of AI on company margins is yet to be realized, as companies are still figuring out how to effectively utilize it [9][10] Alternative Investments - Franklin Templeton has $260 billion of its $1.6 trillion in alternative investments [13] - Individual investors are significantly under-allocated to alternative investments, with only 3% of advisor clients' portfolios allocated to alts [16] - The allocation to alts could potentially increase to 10-15% in the next 5 years, driven by innovation in investment vehicles and the role of financial advisors [17] - Innovation is making alternative investments more accessible to the average investor, similar to the introduction of mutual funds [15]