In this edition of Global Macro Shifts, Dr. Hasenstab and senior members of Templeton Global Macro examine the risks and challenges that may be ahead on the US Federal Reserve’s road to monetary policy normalization. The report includes:

• A macro-level update on the state of the global economy;
• The likely path of Fed balance sheet unwinding and the potential impact on asset markets; 
• Three factors that have potential to push bond yields higher than market expectations; and
• The potential macroeconomic pressures for higher inflation.