3D Report: Q4 2023 Recap—The economy has to normalize

Ryan Caldwell and Lara Rhame review the 3D Report for Q4 2023.

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December 19, 2023 | 45 minute read

A surprise to the upside has continued to delight investors and confound experts throughout 2023. But despite the current giddy growth, gathering headwinds are likely to bring the economy back to a more rational place in the new year.

In this episode of 3D Report, Chief Investment Officer Ryan Caldwell and Chief U.S. Economist Lara Rhame examine the yield curve, household spending, movements in Washington and more to tell us where markets are at the end of Q4 and what investors could see in Q1 and beyond.

Transcript excerpt:

Ryan Caldwell (00:00:01):
Welcome back to the FS Chiron 3D report podcast. This is Ryan Caldwell, and today I’m joined by my colleague and esteemed economist, Lara Rhame. Lara, how you doing?

Lara Rhame (00:00:13):
I’m good, Ryan. How are you?

Ryan Caldwell (00:00:15):
Well, you know, it’s been a quarter, that’s for sure.

Lara Rhame (00:00:18):
It sure has. I think upside surprises, downside surprises—we’ve got to figure out what it all means for next year.

Ryan Caldwell (00:00:24):
Yes. So, you know, what we might do is, as opposed to the unstructured mess of a podcast that I normally throw at you, I thought maybe we would hit some of these “flash issues” that have really set the table to end the year and will probably be the issues that kick off the next year.
And I have a little bit of a cheat code because I get to hear and see what you’re writing and saying, because you’re out there quite a bit. But this was a little bit of a weird quarter actually for me because I felt like I spent a lot more time on companies than I did on macro. Like, it kind of felt like I had the macro figured out and then, lo and behold, come November and December that third quarter of growth just walloped us all.

Lara Rhame (00:01:13):
Yeah. I mean, nobody had that in their forecast.

Ryan Caldwell (00:01:17):
Yeah. So, I thought maybe I’d use you as a tool to dig back into some of these things that I think have become somewhat consensus and kind of feel around where you think the ball moved to—and where you think it ought to be versus where it’s moved to (if there’s any difference). Maybe go through the issues. So, that was what I was hoping to do—to set up into 2024 as to kind of what’s grinding on you, and I’ll lay out what’s grinding on me.

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Lara Rhame

Chief U.S. Economist + Managing Director

Ryan Caldwell

Managing Director, FS Investments

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