What the Inflation Move Means for Interest Rates
Is Inflation Pressure Starting to Subside?
Inflation Shows Signs of Easing
CPI Inflation rose by 8.5% in July over last year, down from 41-year high in June
Reflects recent drop in oil and gas prices
Supply chains appear to be improving, should further help lower prices for goods
Will the Fed Change Course?
Fed likely to raise rates by 50-75 bps on September 21
Also expected to double monthly balance sheet reduction to $95B/month (Quantitative Tightening)
Considerations for CRE Investors
Inflation resistant properties remain in favor
Underlying demand drivers sustaining strong fundamentals for most property types
Investors recalibrating strategies to higher interest rate climate; CRE market remains liquid
*Through July; 10-Year Treasury through August 10
Sources: Marcus & Millichap Research Services, BLS, Federal Reserve