Research report

Q1 2023 3D Report: You can run for a long time, but sooner or later…

Zero interest rates and quantitative easing have long provided seemingly interminable tailwinds. But 2022 and Q1 2023 prove we’re now in a cut-down phase.

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April 21, 2023

Johnny Cash’s “American V: A Hundred Highways” was released posthumously in 2006, with its headline track, “God’s Gonna Cut You Down.” The song has a storied history, originally recorded by the Jubalaires in 1947, then by Elvis Presley with the title “Run On” in 1967, and finally by Cash in 2003, shortly before his death. I thought the song was an appropriate metaphor for markets and investing in 2023. Market participants have run on for a long time as zero interest rates and quantitative easing provided seemingly interminable tailwinds—as 2022 and Q1 of 2023 show, we are now in the cut-down phase.

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Andrew Korz, CFA

Executive Director, Investment Research

Brian Cho, CFA

Managing Director, Head of Quantitative Research, FS Chiron Funds

Ryan Caldwell

Managing Director, FS Investments

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