Via americanbanker.com
State Street’s Yie-Hsin Hung advises against interest rate hikes, backs gold and private markets
The head of one of the world's largest asset managers says the Fed should hold steady while investors lean into alternative assets
When someone managing north of $5 trillion in assets tells the Federal Reserve to keep its hands off the rate lever, it tends to carry a certain weight. Yie-Hsin Hung, President and CEO of State Street Investment Management, did exactly that, arguing the US economy is in solid shape and that the central bank should not raise interest rates for the remainder of the year.
Her prescription for navigating the current environment: gold and private markets as portfolio anchors.
The case for holding steady
Back in November 2025, she publicly supported a 25 basis point rate cut by the Fed in December 2025, citing rising economic risks that warranted a measured easing rather than aggressive action in either direction.
State Street Investment Management operates across more than 60 countries, giving Hung’s team a global vantage point that few asset managers can match.
Gold and private markets as the new portfolio bedrock
Perhaps more interesting than Hung’s rate commentary is where she’s telling investors to park their money. Gold and private markets, she argued, are anchoring many institutional and wealth portfolios right now.
Private markets represent a longer-term structural bet. Hung has spent much of her career expanding private equity and hedge fund capabilities. The pitch to institutional investors is familiar: private markets offer return profiles and diversification benefits that public equities and bonds increasingly struggle to match, especially in volatile environments.
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Hung isn’t positioning these as speculative plays or tactical trades. She’s calling them anchors, suggesting they belong at the core of portfolio construction rather than the margins.
What this means for markets and investors
If the Fed does stay put on rates, as she advocates, stable monetary policy tends to reduce the kind of uncertainty that drives capital to the sidelines.
For gold specifically, a no-hike environment removes one of the metal’s biggest headwinds. Higher rates increase the opportunity cost of holding a non-yielding asset like gold.
State Street’s explicit emphasis on alternatives signals a defining strategic priority. Firms like BlackRock, Vanguard, and Fidelity have all been expanding their private market offerings.
Hung’s November 2025 comments about rising economic risks suggest she’s not blind to potential downside scenarios. The emphasis on gold and alternatives can be read as a hedge against exactly those risks.