Join Chief U.S. Economist Lara Rhame, Executive Director of Investment Research Andrew Korz and Research Associate Alan Flannigan as they examine their outlooks for equities, credit, real estate and essential macroeconomic trends in Q4.
They discuss their view on interest rates, inflation, and the labor market—and how these key macro factors could impact the investment landscape.
Transcript excerpt
Lara Rhame: Welcome back to Fireside, a podcast from FS Investments. I’m Lara Rhame, Chief U.S. Economist, and it’s hard to believe it’s that time again. Our Q4 Research Roundup. Today, I’m joined by Alan Flanagan, an associate on our team, who will share his outlook for corporate credit in these last months of 2024. Alan, welcome.
Alan Flannigan: Hey, thanks for having me, Lara.
Lara Rhame: We’re also joined by my podcast partner, Andrew Korz, an executive director on our team and our thought leader for equity markets, commercial real estate. It’s a lot to discuss. Andrew, welcome.
Andrew Korz: Howdy, Lara.
Lara Rhame: It’s hard to believe that it’s already the last three months. of 2024, our Q4 Outlooks are out. This is always about highlighting our big themes, our key takeaways, and it’s really just fun for us to take a step back and get in a room together and hash it all out. So, I feel like we’ve kind of come full circle, right?
Andrew Korz: Yeah, I think, I think so. I mean, it’s been a heck of a couple years here for the economy. I think, you know, the economy’s outperformed pretty much anybody’s wild expectations from sort of the start of 2023 all the way through this year. We’re starting to see some cracks, Lara. I’m curious if you see those as something sort of signifying something more concerning or is it sort of steady as she goes in the economy?
Lara Rhame: Well, and I think that’s when I, think of full circle. I feel like we started the year nervous about the economic outlook and all of a sudden today we’re really nervous about the economic outlook again. So, you know, to your point, You know, think about back about a year ago, expectations for growth in 2024, like consensus expectations, were 1%. Real GDP growth and today it look it’s looking, obviously, you know, still missing a quarter but it’s looking like it’s gonna be more like two and a half percent a repeat of last year and such a strong growth rate for our economy, which probably more of you know has a potential growth rate of around 2 percent So strong and that’s driven by all the sectors that have just continued to be tailwinds. We’ve had a strong consumer. We’ve had, now, 12 consecutive quarters of positive business investment spending. We’ve had government spending that continues to really, contribute four to five tenths to GDP growth. And it’s meant that from January to really call it July of like, peak optimism. Like we really saw this, you know, strong rotation to everybody expecting just, peak optimism in U. S. growth. And that all kind of started falling apart in July with that really disappointing jobs number. we don’t, not only got [00:03:00] a disappointing jobs number that showed slower growth of employment and the unemployment rate jumping up to 4.3%. But we got backward revisions that show us that the labor markets started deteriorating in the second quarter, much earlier than we originally understood.
