Treasury yields (^TNX ^TYX, ^FVX) are on the move Thursday morning after S&P Global's flash US composite Purchasing Managers Index (PMI) jumped to its highest level in two years.

Franklin Templeton Fixed Income Chief Investment Officer Sonal Desai joins Catalysts to break down how the latest economic data may affect the Federal Reserve's policy decisions.

In terms of where the 10-year Treasury yield may fall, Desai tells Yahoo Finance, "I expect, when I was asked for the range for the 10-year, 4 or 5 was right in the center of them, 4.5, and I don't have many reasons to change that view. I think it's 4.5. I think the Fed is going to have a relatively short and shallow cutting cycle, and I don't anticipate the short end going much below 4, because having a massive recession is not my baseline. I think at the background, what we really need to be prepared for is a short, shallow rate cutting cycle. But then after that, get prepared for higher long-term yields. "

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.