The Eye of the Storm? Interest Rates, Tariffs and Uncertainty

Written By Marc Nicholson

Tariffs, Taxes, and Treasuries: ​
CRE Navigates a Narrow Window of Clarity​​

​Calm May – June Lull Could End Soon​

  • 10-year Treasury has sat in a 4¼ % – 4½ % band, drifting to the low end in recent weeks​

  • Uncertainty index plunged after April’s record spike as the 90-day tariff pause and solid data soothed nerves.​

  • Pause expiry and tax-bill rollout in July–Aug. could send uncertainty climbing again.​

Tariffs Stay High—and Could Pivot on Short Notice​

  • Effective rates today: China 27.9%, Mexico 10.7%, Canada 11.2%, all others ≈11% (autos 25 %, steel/aluminum 50%)​

  • 90-day reprieve ends Jul 9; prior moves (e.g., Canada digital-tax reversal) show rates can change overnight​

  • Any fresh shifts would quickly reignite market volatility and planning headaches for investors​

New Tax Law Favors CRE but Adds Rate Pressure​

  • CRE-friendly tax win: 100% bonus depreciation may boost first-year returns​

  • Budget score adds about $3.3T deficit; Treasury plans $554B new debt in the next three months​

  • Extra issuance, with the Fed and foreign holders trimming portfolios, risks nudging long-term rates higher—making “lock-in-now” financing attractive​

*Through June​
The Economic Policy Uncertainty Index is a measure of policy-related economic uncertainty, derived from the ​frequency of news articles discussing economic policy uncertainty in leading U.S. newspapers. Higher values indicate greater uncertainty. ​
Sources: Marcus & Millichap Research Services, Scott R. Baker, Nicholas Bloom, and Steven J. Davis.​

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Marc Nicholson
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