FTSD News and Press, Franklin Liberty Short Duration U.S. Government From 01/29/23

Summary The idea of a “soft landing” is only a reality if you exclude, in most cases, rather devasting financial consequences. So far, the economy seems to be holding up well despite an aggressive rate hiking campaign providing the cover for the “soft landing”...

Summary Last year saw the most aggressive policy tightening path in four decades, but Fed officials have laid the groundwork for more modest 25bp hikes in February and March. Recessionary forces are building though and inflation looks set to slow sharply from here, implying rates cuts w...

Summary The evidence indicates that the Fed’s rate hikes are having the desired effects. Subsequent reports indicate that retail sales fell to 1.1% annualized growth in December, driven by declines in car sales and sales of other goods; and this trend appears to have continued in...

Summary Consumer spending slowed sharply through the fourth quarter and we will need to see a rapid turnaround to prevent a contraction in the first quarter of this year. Meanwhile, the Fed's favoured measure of inflation is already undershooting the Fed's forecasts from last month, add...

Summary Conventional wisdom these days is that in order for the Fed to bring inflation down, they are going to have to kneecap the economy. Looking back at last year as a whole, real GDP shrank at a 1.1% annualized rate in the first half of the year, and grew at a 3.1% annualized rate i...

Summary The Federal Reserve’s policy making committee will meet January 31 to February 1, 2023, and their decision will be tough, more difficult than any of their 2022 choices. Inflation seems to be dropping, but at possibly unrealistic rates, while labor markets continue to show...

Summary For the past 18 months or so, I have argued that the surge in inflation which began about two years ago was fueled by a surge in the M2 money supply that began in the months following the Covid panic. Today we received the M2 number for December '22, and it showed that the money...

Summary The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome. The gap is most dangerous when there are potential rewards for pushing your luck. Over the past year, the S&P 500 has retreated only modestly from its Ja...

Summary We believe macroeconomic indicators offer little to cheer about in the first quarter of 2023 - and perhaps through the remainder of the year. Despite Wall Street’s rosier prognostications, we think that a challenging mix of alarming economic inequality, monetary policy he...

Summary Once the ebbing omicron wave allows Chinese citizens to feel comfortable again about social engagement, we should see a decent bounce in consumption, even property transactions, and business investment will be momentarily buoyed. Inflation remains the greatest threat to the glob...