What Investors Should Know About The Latest Inflation Data

Inflation Rose at Highest Pace in 41 Years

• Driven by energy prices, CPI inflation surged 9.1% in June over last year
• Declines in fuel and commodities prices may ease inflationary pressure

Aggressive Fed Action Expected

• Fed likely to raise interest rates by 75-100 bps on July 27
• Abundant capital continues to target CRE; Mitigates risk of market softening

Implications for CRE

• Financial market volatility benefits stable investments such as CRE
• Inflation resistant properties favored
• Higher yield secondary/tertiary markets increasingly favored
• Commercial assets with rent escalators and properties with short-leases or value-add opportunities favored

*Through June; 10-Year Treasury through July 14
Sources: Marcus & Millichap Research Services, BLS, Federal Reserve

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