It is time for the Fed to drop its over-emphasis on data dependency and move to a more strategic view that takes into account the risks to the outlook that will be front and center this year and next. … READ MORE >
bond market
Bond market shows a shift in inflation expectations
The forward market now anticipates a 5.25% terminal rate for the federal funds rate at the Fed’s June meeting and then a gradual unwinding just below 4% in two years. … READ MORE >
RSM UK Financial Conditions Index implies rising risk of instability
The RSM UK Financial Conditions Index is warning of a dramatic increase in credit risk that, along with the depreciation of sterling, has the potential to derail commercial activity. … READ MORE >
Low treasury rate is a boost for home builders, neutral for commercial real estate
Bonds have been declining in recent weeks following a 25-basis-point rate cut from the Federal Reserve and expectations of further cuts amid rising concerns over an impending recession. Recession concerns were escalated by the inversion of the U.S. and U.K. two- and 10-year yield curves and the fall of 30-year Treasury yields to 2.07%, a record low. While this trend in the bond market will likely drive down the 30-year fixed mortgage rate and translate to more purchasing power for home buyers, it will do little to juice the market for commercial real estate. … READ MORE >