Franklin Templeton's Sonal Desai Says The Upcoming Recession Will Differ From 2008 Financial Crisis: 'Not The End Of The World'

Sonal Desai, Chief Investment Officer at Franklin Templeton Fixed Income reportedly said there will be a recession but not of the devastating type seen during the global financial crisis.

"A recession is not the end of the world. It's very problematic but it is a recession of the style of the global financial crisis which is devastating. A manufactured recession such as the Covid crisis, which came about not for economic reasons but for other reasons, those can be quite devastating," she told Bloomberg.

Also Read: Best Penny Stocks

Desai also explained why she believes a potential recession may not be as dramatic as expected.

"…given that we come into this with very healthy consumers, reasonably healthy corporates in terms of how they are covered and indeed with increasingly better financial coverage in terms of governance and so on, I think we will get a recession but it might not be as dramatic and as sharp as the fear of the recession," she said.

Recession is one of the topics that is witnessing contrarian opinions from prominent market experts in recent times. While a section of Wall Street expects a lower probability of recession, some believe it could be inevitable.

Contrarian Takes: For instance, DoubleLine Capital CEO Jeffrey Gundlach said on Tuesday it looks increasingly possible the United States will tip into a recession. At the same time, Goldman Sachs has revised its estimate about the U.S.’ chance of entering a recession over the next 12 months, reducing its judging probability from 35% to 25%.

Wall Street is now keenly watching out for the Federal Reserve's policy decision scheduled next week which will also give crucial clues about the central bank's future policy path — a factor that will have a significant bearing on the possibility of a recession.

Also Read: Jim Cramer Notes Uptick In Adobe Stock, Says Generative AI Can’t Be Underestimated