COULD THE U.S. STILL FACE A RECESSION?
If Federal Reserve Holds Rates High For Too Long…
- The Fed is continuing to hold rates between 5.25% and 5.50%
- Rates need to stay high long enough to control inflation, but holding too long could spur a recession
Indicators Do Not Currently Suggest High Recession Risk
- Historically, yield curve inversions have served as good predictors of most impending recessions
- However, the unique economic disruptions and stimulus injection could make the current inversion less indicative
- Another indicator, unemployment rate, currently suggests we do not face an imminent risk of a recession
Recession Could Be A Mixed-Bag for CRE investors
- A recession could slow household formation and consumer spending, weighing on space demand for various CRE properties
- It could also push interest rates down, helping revive CRE deal flow following a period of investor recalibration to the recession
*Sources: Marcus & Millichap Research Services, BLS
Watch Video Below: