Franklin Templeton sees Fed pause as AI spending slows

Franklin Templeton expects the Federal Reserve to pause its tightening cycle as AI-related spending cools, a shift the asset manager says could steady markets and shape investment strategy amid changing inflation and growth forecasts. The call comes as crypto markets remain sensitive to rate expectations, with bitcoin and major tokens trading on Fed policy signals and liquidity conditions. A pause would remove a key headwind for risk assets, though the firm frames it as a response to slowing AI capital expenditure rather than a broad easing cycle. Investors should watch upcoming inflation prints and Fed commentary for confirmation, plus whether AI-linked equities and crypto volumes react to any softening in the spending outlook.