3-MONTH AND 10-YEAR TREASURY YIELDS INVERT FOR THE FIRST TIME SINCE 2019

3-Month Treasury Yield Rises Above The 10-Year

• The 3-month and 10-year treasury yield curve inverted last week, signaling heightened risk of an impending recession

• An inverted yield curve is not a foolproof indicator. A recession followed 8 of the last 10 inversions

Expectations Point Toward A Mild Downturn If One Occurs

• Economists continue to forecast very mild decreases in economic growth for the first two quarters of 2023

• The most significant factor influencing recession risk has been hawkish Federal Reserve policy in response to elevated inflation

CRE Investors Should Keep Long-Term Outcomes In Mind

• Intense media discussion of downside risk can weigh on investor sentiment, often pushing investors to the sidelines, but downturns are followed by growth that generally lifts CRE performance

• The weakened short-term economic outlook offers investors an opportunity to calibrate their strategies to capitalize on the next expansion cycle