In this episode of FireSide, Ryan Caldwell, Managing Director and Chief Investment Officer of Chiron Funds, and Lara Rhame, Chief U.S. Economist, discuss the timing of a possible recession and assess macroeconomic trends and global investment opportunities.
Transcript excerpt:
Ryan Caldwell (00:01):
This is the 3D report, a podcast from FS Investments and Chiron, I’m your host, Ryan Caldwell. Welcome to the podcast Lara Rhame. Another quarterly 3D, quarterly podcast update. How are you?
Lara Rhame (00:32):
Second quarter 2023. I’m great. I’m great. Markets are keeping me on my toes. Economic data keeping me on my toes, and springtime, everything’s blooming…
Ryan Caldwell (00:43):
This springtime. Time for all the seasonal adjustments to go the other way.
Lara Rhame (00:47):
That’s right.
Ryan Caldwell (00:48):
Just kidding. No, we’ll get into that. So, I thought maybe what we would talk about, and we do some planning but not a lot. And I do that because I want kind of Lara’s, off the top of her head, what she’s thinking without a lot of time to analyze and be moderate. And for our listeners, I like to kind of think of Lara as really the voice of reason. She is really the most kind of grounded and reasonable, and I’ve said this in the past, but I’d love to talk about her background because it’s so unique. Not only being an economist but also being an FX currency expert. She sits on the board of banks, so she’s got this really wide purview and sees a lot of the things that we as market participants talk about. So, in terms of being kind of an ivory tower economist, that’s not what she is.
So, it’s very functional. So, I love to kind of throw these extreme positions at her and just kind of see how she walks me off the ledge or where to stake out a different opinion. When, in 3D I kind of staked out this extreme position, which was that for all the broad strokes, effectively the economy was likely to be wildly more resilient to the Fed than the market. And if I kind of crystallized one queue, right? The thing that’s probably the seminal market economic event was SIVB, the deposit bailout that all of a sudden sort of threw a wrench in this kind of smooth trajectory of Fed policy and things going smoothly. And I think, you know, when we did our last podcast in Philly, we had kind of tongue in cheek made this point that like the Fed’s going to keep going until they break something and then they’ll probably stop. And the market somewhere in there and here is tried to figure out if they’ve indeed broken enough things to go ahead and stop. Or, if you know there’s more that needs to be done for kind of the inflation boogeyman and what that might mean six, 12 months from now.
