Impact of October Inflation Numbers on CRE
How October Inflation Numbers Impact The CRE Outlook
Is Inflation Coming Down?
October CPI data came in lower than expected, with producer prices, steel and lumber costs, and shipping expenses falling as well
Inflation is well ahead of the target level, and an 8% annual rise in producer prices suggests there are still more costs to be passed onto consumers
Federal Reserve Signals Smaller Rate Increases
Chairman Powell has been clear in his commitment to achieving 2% inflation
The Fed is expected to raise the overnight rate 50 basis points in December, then adopt a slower pace of rate hikes in 2023
Potential Impacts on CRE
More stable expectations are likely to alleviate some of the pressure that has forced investors to recalibrate strategies mid-deal
Diminished uncertainty can help reduce the expectations gap between buyers and sellers
*Through October
Sources: Marcus & Millichap Research Services, BLS