FTSD News and Press, Franklin Liberty Short Duration U.S. Government From 01/11/23

Summary We already know about housing’s woes, but manufacturing, and now service-related gauges, are in contractionary territory. However, the latest jobs report continued to reveal that a rather solid labor market setting still exists. So, what if the U.S. economy manages th...

Summary The US monetary tightening commenced in February of 2021 - the month that the US monetary inflation rate peaked at an extraordinary level of 40%. Within the Keynesian framework, the economy can be viewed as a bathtub filled with an amorphous liquid called “aggregate deman...

Summary The lag effect of monetary policy changes will surprise the Fed as the fiscal “pig” of stimulus begins to exit the economic “python.”. The massive surge in stimulus sent directly to households resulted in an unprecedented spike in “savings,...

Summary 2022 saw a number of major shifts occur, significantly altering the investment landscape that had prevailed for the last decades. Inflation and higher interest rates led to poor investment returns across asset classes, and 2022 will mainly be remembered as a very difficult year ...

Summary The overall stock market is grossly oversold, and my small- to mid-cap stocks are trading at 6.8 times median current earnings and just 2.8 times median forecasted 2023 earnings. Clearly, the price-to-earnings compression has become ridiculous and relentless. We are now at the t...

Summary After trading with a positively sloped curve through the first half of 2022, the yields on 6-month, 12-month, and 2-year Treasuries began to converge in late July/early August. In November, the 2-year yield started to drift lower, while yields on the 6-month and 12-month held fi...

Summary Recession foretold in developed markets (DM), a pause in central bank rate hikes and China’s reopening help shape 2023 and reinforce our tactical views. European equities led DM stocks higher. Surprisingly weak U.S. services data spurred bets for Federal Reserve rate cuts...

Summary Trying to increase the Fed funds rate to 7%, 2.5% higher than they are currently, risks triggering a catastrophically deep recession. As economic growth expanded, increasing wages and savings, the entire period was marked by inflation surges. The problem comes if inflation r...

Summary Massive government transfer payments during the Covid era ended up being monetized and stored in bank saving and deposit accounts. When people emerged from their Covid cocoons in early 2021, they unleashed a tsunami of spending. Inflation, as a result, surged. The moneta...

Summary Strength in indexes such as the ISM Services PMI has been one of the core arguments for those who assert the economy will avoid a second dip into recession. When it comes to the whole economy, the NFIB survey looks like a demand destruction situation. Looking forward in 2023...