Research
Featured topics:
- The Fed Raises Interest Rates
- Potential Sanctions' Impact On CRE
- Short Term Energy Outlook
- Consumer Price Index
- Job Openings and Labor Turnover Survey
- New Business Applications
- Return To Office In Gateway Markets
- Environmental, Social, and Governance (ESG)
- The Great Resignation
- Leading Indicator of Remodeling Activity (LIRA)
1. THE FED RAISES INTEREST RATES
• For the first time since 2018, The Federal Reserve’s policy-setting committee raised interest rates as they pivot away from recovery-focused accommodations towards a more aggressive fight against persistent domestic inflation.
• The Federal Funds rate was raised by 25 basis points, moving from the 0-0.25% range that it has been at since March 2020 to a target range of 0.25%-0.50%. Leveraging results tabulated from the recent Summary of Economic Projections released on March 16th, FOMC members, on average, project six more rate hikes in 2022 in an effort to curb inflationary pressures not seen in more than 40 years.
• Throughout the pandemic-recovery, The Fed consistently signaled its commitment to an accommodative policy regime as the US economy dealt with the macroeconomic scars of COVID-19 case surges and related restrictions on activity. As GDP recovered and labor market distress continued to subside in 2021, policymakers began pivoting their focus to tempering high inflation as stronger consumer demand bucked up against supply constraints.
• The challenge for the Fed now will be to moderately slow the economy enough to relieve inflationary pressures without kicking the US economy into recession. The FOMC’s decision to raise rates despite increased economic and geopolitical uncertainty stemming from the War in Ukraine may be a signal that they are willing to accept a degree of economic pain in order to reduce inflation.
