About this episode
The new year brings new possibilities. In FireSide’s special 50th episode, Director of Investment Research, Kara O’Halloran, and Director of Investment Research, Andrew Korz gather to analyze three different economic scenarios for 2023, and explore how they might impact two of the most interesting areas of the market that we’re closely watching: Credit and commercial real estate.
Kara O’Halloran (00:05): Welcome back to FireSide, a podcast from FS Investments. My name is Kara O’Halloran, I’m a Director on the investment research team here. As we enter 2023, a lot of the same macro questions from 2022 remain. So on today’s episode, we are gonna walk through how various economic outcomes could impact two of the more interesting areas of the market that we see today, specifically commercial real estate and credit. So to walk through all of that with me, I have brought on my colleague Andrew Korz. Andrew, thanks for joining.
Andrew Korz (00:35): Hey, Kara, good to be here. And I hear we are celebrating a big landmark today. We have, I think, the half-century episode celebration for FS FireSide.
Kara O’Halloran (00:45): It is the 50th episode. I know, I know. I love celebrating like the halfway to something. I just threw my goddaughter a half birthday party this past weekend. So, but no, we’re, we’re excited. Any reason to celebrate, right, exactly. And I
Andrew Korz (00:58): Hear exactly, I hear they’re giving you another 50 episodes. I think I…
Kara O’Halloran (01:00): That’s what I…we’ve been renewed. We’ve been renewed for the next 50. We’re very excited to continue something.
Andrew Korz (01:06): Right.
Kara O’Halloran (01:07): Thank you. We’re excited to, to bring lots more FireSide this year. Let’s get into it. So coming into this year, it seems that the consensus is that there’s not a lot of consensus, right? I mean, I think there’s a few things that we all seem to agree about. Inflation has likely peaked, it’s heading lower. The probability of a recession has risen quite a bit. But what we haven’t really seen consensus on is when will the Fed stop hiking? And then when they do stop hiking, what happens next? If we have a recession, what does that look like? And at the end of the day, what does all of this mean for markets? So in that vein, I kind of wanted to take a different approach from our normal Outlook episodes and walk through kind of a scenario analysis, right? Almost your classic bull bear based case, but using various economic outcomes than what that’s going to mean for commercial real estate and for credit.