The 10-year Treasury yield (^TNX) edges closer to that 4.5% benchmark following Donald Trumps win over Vice President Kamala Harris in the 2024 election.

While equity markets have taken off this morning, Franklin Templeton Fixed Income Chief Investment Officer Sonal Desai weighs in on the bond market's (^TYX, ^TNX, ^FVX) potential as more Congressional election results come out. The Federal Reserve's November meeting is underway with the central bank to reveal its latest interest rate decision tomorrow, Thursday, November 7.

"We might see some volatility in the period ahead. And I would fully agree that that sharp spike, to some extent, is a reaction to the expectation of solid growth, deregulation, tax cuts," Desai tells Seana Smith and Madison Mills. "WWe have been calling for some time for a Fee neutral rate of about 4%, and then if you assume that the economy is not going into a recession and an upward sloping yield curve, you actually already very easily get to the 4.5 to 5% level."

Desai goes on to comment on whether the Fed could cut rates further at its FOMC meeting, taking into consideration the possible $7.5 trillion that could be added to the national deficit under a second Trump administration.

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This post was written by Luke Carberry Mogan.