It's Not Time to Raise Rates, Says State Street's Hung

• Money is flowing into money market funds, which are seen as a 'durable asset class' due to elevated yields, anchoring many portfolios.
• Investors are barbell-ing portfolios, leaning into AI for growth and fixed income, cash, gold, commodities, and private markets as anchors.
• The US economy is in good shape, but the Fed should hold rates steady for the balance of the year, as the labor market is not a strong source of inflation.
• AI is viewed as an enabler for efficiency and revenue generation at State Street, not primarily a headcount reduction tool, with full impact expected in 1-3 years.

Yie-Hsin Hung, President and CEO of State Street Investment Management, discusses current market flows, noting money moving into money market funds and a barbell strategy for portfolios. She believes the Fed should hold rates steady due to a robust economy but concerns about the labor market, and sees AI as an enabler for efficiency and revenue, not primarily headcount reduction.