U.S. Treasurys, an oasis of yield amid a global desert of low returns, are not a safe haven for fixed-income investors, said Michael Hasenstab, Franklin Templeton’s executive vice president  and chief investment officer of global bonds.

“Though the market is falling toward U.S. Treasurys as a safe haven, that could prove a very unsafe decision,” Hasenstab said. “We think the U.S. Treasury valuations are nowhere near justified by market fundamentals and macroeconomic conditions.”

Speaking at the Morningstar Investment Conference in Chicago on Monday, Hasenstab said that U.S. interest rates are likely to be driven higher by market factors or by the sheer will of the Fed. Therefore, he said, treasuries are not the secure investment that many international and domestic investors believe them to be.

Instead, Hasenstab favors investing in emerging market debt. But he warned that not all emerging markets are created equal.

“There are exciting opportunities in emerging markets, but all of this hinges on our views of China,” Hasenstab said. “We’ve been of the view that China is headed for a soft landing.”

Hasenstab is noted for contrarian calls on Ukranian and Irish debt in recent years, where big bets led to attractive returns for investors. On Monday, he singled out Brazil as an area of opportunity for fixed-income investors.

“Brazil was in a situation where things got worse, but they still don’t have a lot of external debt,” Hasenstab said. “We think they have time to get the fixes right.”

After arguing that China could turn the corner on its demographic challenges and stabilize in the short term, Hasenstab also singled out Mexico, the Philippines and Indonesia as countries that presented opportunities for investors, while warning against Turkey and Venezuela.

In the near term, foreign investment from low or negative rate regions like Japan and the EU is likely to keep Treasurys afloat, even as inflation begins to increaase.

At the same time, the dollar is likely to strengthen against the euro and the yen, buoyed by continued quantitative easing and accommodative monetary policies in Europe and Japan, said Hasenstab.

Simultaneously, Hasenstab believes that the Fed will be pressured to increase interest rates after the impact of low oil and commodity prices finishes circulating through the markets.

“The incredibly accommodative monetary policy in the face of inflation will create imbalances and will need to be corrected,” Hasenstab said.

Hasenstab said that while recession might not be imminent, it is still on the horizon.

“Looking five years out, it’s hard to predict that you wouldn’t have a recession at that point,” he said. “For the next year to two years, you have to remember that this was an exceptional drawdown and an exceptionally strong recovery. You can’t look at the historical patterns. This cycle is going to be elongated and as a result it probably lasts a little bit longer.”