New year, new view

Research experts Kara O’Halloran and Andrew Korz gather to analyze possible economic scenarios for 2023.

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January 27, 2023 | 30 minute read

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.

Transcript excerpt:

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.

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. FS Investments is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All views, opinions and positions expressed herein are that of the author and do not necessarily reflect the views, opinions or positions of FS Investments. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. FS Investments does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact any investment result. FS Investments cannot guarantee that the information herein is accurate, complete, or timely. FS Investments makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

Any projections, forecasts and estimates contained herein are based upon certain assumptions that the author considers reasonable. Projections are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results. The inclusion of projections herein should not be regarded as a representation or guarantee regarding the reliability, accuracy or completeness of the information contained herein, and neither FS Investments nor the author are under any obligation to update or keep current such information.

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Andrew Korz, CFA

Executive Director, Investment Research

Kara O’Halloran, CFA

Director, Investment Research

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