Interest Rate Volatility and Trade War: Implications for CRE Investors

  • Escalating Trade War Sparks Interest Rate Volatility

    • Following 4 aggressive rate hikes in 2018, the Fed  cut interest rates on July 31 – their first cut since 2008

    • Escalating trade tensions with China sparked uncertainty, induced flight to safety of bonds

    • 10-Year treasury plummeted to the lowest level since late 2016 and remains highly volatile

  • Economic Outlook Steady…Trade War Poses Risk

    • The underlying economy remains sound – job growth, consumption and demographics are all positive

    • Escalating U.S./China trade war slowing global economies; Several countries dropping rates

  • Stability of CRE Investment Increasingly Attractive

    • Uncertainty and financial market volatility reiterate stability of commercial real estate

    • Lower borrowing rates may be temporary; if trade war ends, rates could rise quickly

 

 

 

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