CNBC Television · Sep 23, 2026
With Jenny Johnson, President and CEO of Franklin Templeton
Productivity is running at 2.5%, by Jenny Johnson's count, and she does not credit any of it to AI.
The Nasdaq had closed at a record the day before. Everyone talks about AI, Johnson said, but she gave the productivity gain to cloud computing and older digital tools, and said new technologies take years to show up in the numbers.
"Electricity took 30 years to get into manufacturing."
Jenny Johnson, president and CEO of Franklin Templeton, on CNBC Television. The firm manages nearly $1.8 trillion, and its private credit team lends to middle-market companies whose results she cited as evidence the economy is holding up.
The full segment is covered here so you can skip it.
Here are the 7 calls that matter.
Key Takeaways
Corporate earnings at an all-time high explain why stocks kept rising through a year of bad headlines
Her firm's team is calling for rates to possibly rise again in December, and she still expects the market to hold up
Credit spreads are tight, which tells her lenders are not expecting defaults
Productivity is at 2.5% and she doesn't think any of it is AI
Cloud computing and older digital tools get the credit
3D printing and new drugs would dominate the news if AI were not taking all the attention
Electricity took 30 years to reach manufacturing, and she expects AI to take time too
A 1997 magazine cover predicted the death of the broker, and advisers now do more than they did then
The Mag-7 have turned capital-intensive, and not all of that spending has gone through the income statement
1. Records Despite the News
The segment opened on the futures. A host read them out: Dow futures up about 16 points, S&P futures up six, Nasdaq futures down 20. The Nasdaq and the Nasdaq 100 had both closed at records the day before. The host introduced Johnson and her firm's nearly $1.8 trillion in assets, then listed the headlines the market had ignored: geopolitics, the price of oil and a Fed raising rates. The S&P 500 was less than 1% from a record and the Dow was about 5.5% off its high, by the host's figures.
Nobody would have predicted this year's market
I think if you had started the year and said all these things are going to happen, you would have said, there's no way the market's going to be able to continue to go up.
Jenny Johnson
Her explanation was earnings. "And yet earnings, corporate earnings, all time high," she said. "People are continuing to break records." Her firm's private credit team does a lot of middle-market lending, and she said it had just told her what share of its borrowers are beating their own financial models. As long as the consumer, the economy and corporate earnings stay strong, she expects the market to keep rising.
2. A December Hike Is Possible
The host put it to her that Franklin Templeton expects a harder second half, with headwinds replacing the tailwinds that helped the economy so far. Johnson agreed on inflation and the Fed.
Another rate rise could come in December
I think we've seen inflation's pretty sticky. Obviously I think we've got a hawkish Fed. And you may have rates rise again in December. I think that's what our guys are calling for.
Jenny Johnson
She pointed to the bond market for reassurance. Credit spreads, the extra yield lenders demand over government debt, are still tight.
The bond market is not pricing defaults
So people aren't expecting defaults.
Jenny Johnson
3. Productivity Without AI
Johnson then brought in a number of her own.
The productivity gain predates AI
So I think as long as things stay pretty strong and let's look at productivity is at 2.5%. And I don't think any of that is AI. Nobody's figured out how to get AI really yet.
Jenny Johnson
A host said "resilience" was the buzzword in her notes and asked what sat under the earnings. The consumer is still spending, she said. Asked whether regulation or taxes played a part, she credited the current administration.
Regulation is friendlier than under the last administration
Listen, believe me, being under this administration versus the prior administration, the regulatory environment is much friendlier. I think that's a good thing.
Jenny Johnson
The host pressed on where the productivity came from if not AI, and joked that perhaps everyone was just working too hard. Johnson named digital technology and cloud computing. "It always takes years," she said.
4. The Overlooked Technologies
Johnson said AI has pushed other advances out of the conversation. She named 3D printing, which is already producing ears and dental work, and the pipeline of biologic drugs and personalized medicine.
Other breakthroughs get no attention
Nobody even talks about that stuff. And if they were on their own, we'd be completely focused on them.
Jenny Johnson
She began to say she could tell "great stories" about AI when the host cut in to ask whether AI would speed up everything she had just described.
5. Why AI Takes Time
Johnson answered yes, then corrected herself.
Companies first use a new tool to do the old job better
It hasn't yet. I think it takes time to figure out. The first thing you do is you make you improve what you do today. Once you start to get comfortable with the technology, that's when you get the leapfrog, right?
Jenny Johnson
Her example was the iPhone. When it came out, she said, none of its users imagined the applications that would later run on it.
The uses only appear once people experiment
You can't possibly imagine it until you start to play with it. That takes a long time. Electricity took 30 years to get into manufacturing.
Jenny Johnson
6. The Broker Did Not Die
A host said several financial stocks had fallen the day before on concern that Meta's Muse agent is popular enough to take over some financial tasks, which could cut what firms can charge customers, and asked whether she was worried. Johnson recalled a 1997 Business Week cover that declared the death of the broker.
Advisers do more now than in 1997
The internet was going to destroy the broker. Your adviser today gives you so many more services than they were ever giving you back then. So I think these things enhance and people still want the human element.
Jenny Johnson
She did not wave away the risks. She said some reports about the newest models are "scary," and gave two examples: models "jumping out of their sandbox," meaning escaping the test environment they run in, and "cleaning their logs," meaning erasing the record of what they did.
Every technology has been blamed for ending jobs
But for whatever reason, human nature so far, every time there's been a major technological advance, we predict the end of jobs. And yet look at the latest jobs number.
Jenny Johnson
New technology has tended to add to employment, she said.
7. Mag-7 Spending Worries
A host raised what he called a "weird statistic." On Monday, more stocks fell to new lows than rose to new highs, even though the S&P 500 was up that day and within 1% of a high. By the host's account, the last time that happened was December 21, 1999.
The host's comparison with the dot-com peak
That was a few months before the dot-com bubble.
CNBC Television
The host asked whether that meant a handful of tech stocks were carrying the index and could fall back. Johnson said the market has in fact broadened since the start of the year. She did name one concern.
The biggest tech companies now spend like industrial firms
And I do have some worries on the Mag-7 just because you've gone from capital light businesses to capital intensive businesses. And not all that expenditure has gone through the P&L. Right?
Jenny Johnson
She set that aside and returned to credit. Tight spreads mean investors are buying corporate debt at higher rates, and a borrower needs earnings to carry that debt.
Tight spreads signal confidence in earnings
And again, you look at the bond market, when credit spreads are really tight, it's because people aren't predicting problems.
Jenny Johnson
Bonus Insights
A host paused over a word in her notes
Midway through, a host stopped to ask whether the word in Johnson's notes was "resilience" or "resiliency," decided it did not matter, and settled on resilience.
Johnson's bottom line is that corporate earnings, not AI, have carried the market this year, and that AI's effect on productivity is still years away, as electricity's once was.
Products, Companies & Tools Mentioned
Franklin Templeton (Johnson's firm, with nearly $1.8 trillion in assets under management and a private credit arm that lends to middle-market companies)
Muse from Meta (The AI agent whose popularity the host said had pushed financial stocks lower the day before)
iPhone (Her example of a technology whose uses nobody could picture at launch)
The Mag-7 (The largest US tech companies, whose shift to heavy capital spending is her main worry)
Books & Resources Mentioned
Business Week's 1997 "death of the broker" cover (Her evidence that predictions of the adviser's end have been wrong before)
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