Highlights from Fed Meeting and Implications of a Hawkish Fed

• Minutes from the latest Fed meeting were just released – Sentiment was hawkish

• Fed reiterating possibility of 50 bps rate hike(s) at future meetings

• Also began laying the groundwork for Quantitative Tightening (QT)

  • • Timing unclear – “…commencement of balance sheet runoff at a coming meeting…”

  • • Fed will let up to $95B per month expire; Previously was buying $125B per month

• QT puts upward pressure on long-term rates (10-Year), reducing yield curve inversion risk

• Overall, the state of the economy remains sound – Job growth, consumption, wage growth all very positive

• Sustained elevated inflation and rising interest rates are bigger risks for CRE investors

• Real estate is a great investment vehicle during times of inflation