CBRE EA Blog: Deconstructing CRE

  • Is a Fiscal-Monetary “Collision” Imminent?

    Apr 6, 2018, 15:52 PM by Nikhil Mohan
    A poorly timed fiscal stimulus—in the face of tighter monetary policy and an economy that has reached or is near its potential—could leave the economy weaker in the years to come.
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  • December rate rise: Fed raises rates as expected; three more hikes likely in 2018

    Dec 14, 2017, 13:42 PM by Jeff Havsy
    The Federal Reserve has raised the federal funds rate 25 bps, to a target range of 1.25% to 1.50%. This was the Fed’s fourth 25-bps increase since December 2016 and was widely anticipated given the economy’s recent near-3% quarterly growth, robust job growth, record-low unemployment, modest wage gains and rising consumer and producer prices.
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  • September rate unchanged: The beginning of quantitative tightening? Not quite

    Sep 22, 2017, 13:59 PM by Jeff Havsy
    At its latest meeting, the Fed kept the federal funds rate at 1.0%-1.25%. An increase is expected in December, with economic conditions generally good. Commercial real estate fundamentals remain strong, and a Q4 rebound in economic growth should keep them healthy at least through H1 2018.
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  • June rate rise: Another 25-bps increase by the Fed

    Jun 14, 2017, 16:28 PM by Nikhil Mohan
    Since the Fed resumed its (so far, incremental) increases in December, long-term rates have remained stable, keeping cap rate increases limited. CRE fundamentals remain strong, so improved economic growth should lead to an extended cycle.
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  • Just how high might long-term interest rates actually go?

    Jun 7, 2017, 13:49 PM by Bill Wheaton
    Some thoughts on the factors that historically have governed the relationship between short- and long-term interest rates—and a new one.
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  • A familiar slow start for GDP growth

    Apr 28, 2017, 15:46 PM by Jeff Havsy
    Q1 GDP growth was the slowest in three years. How concerned should we be?
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  • Fed Watch: Indecision by committee

    Mar 31, 2017, 12:18 PM by James Bohnaker
    Most FOMC members agree that rates will need to head higher in the next few years, but how quickly is a source of great debate. Don't be surprised to see even greater indecision as uncertainty rises later in the cycle.
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  • March rate rise: Fed looks to get ahead of inflation

    Mar 15, 2017, 15:05 PM by James Bohnaker
    Upward pressure on cap rates is expected, muted by strong capital flows from foreign and domestic institutional investors. CRE fundamentals remain strong overall, and improved business and consumer confidence may lead to enhanced late-cycle tenant demand.
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  • Forecaster Beware: Don’t jump the gun on Trump stimulus

    Feb 1, 2017, 15:22 PM by James Bohnaker
    An update on EA's U.S. macroeconomic outlook: Even if Trump is able to enact his economic policies as planned, the stimulus will be slugging against a mature economy. Higher interest rates, the strong dollar, and a tight labor market are enough reason to believe that the natural business cycle is on the downslope. Moreover, there is plenty of evidence that fiscal policy is less effective when the economy is at full capacity, so that will work against any stimulus as well...
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  • Fed Watch: Going with the flow

    Feb 1, 2017, 13:53 PM by James Bohnaker
    There's no reason for the Fed to be vocal at this point, and 2017's first FOMC meeting saw no policy changes made. The Fed is keenly aware of the heightened degree of fiscal uncertainty and clearly has not bought into the notion—already accepted by many economic forecasters—that fiscal stimulus will launch the economy into higher gear. EA's baseline outlook remains tempered as well, at least until we see where the new administration is heading.
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