Asset Allocation Update Revisiting our forecasts in light of the Fed After taking on board the Federal Reserve’s recent hawkish pivot, we now forecast that the central bank will raise its policy rate much more quickly than we had previously anticipated. This Update... 17th December 2021 · 3 mins read
US Housing Market Outlook Major Apartment Markets Outlook (Q4 2021) Apartment markets in major coastal cities underperformed the national average in 2021, as they were more heavily impacted by lockdowns and the move of some households to cheaper, sunbelt cities. But... 17th December 2021 · 8 mins read
Global Markets Update Tweaking our forecast for Treasuries We are revising down our end-2022 and end-2023 forecasts for the 10-year US Treasury yield by 25bp each, to 2.00% and 2.25%, respectively. This compares to its current level of ~1.4%. 17th December 2021 · 3 mins read
US Economics Weekly Markets wrong to doubt the Fed Market pricing suggests investors remain unconvinced that the now-hawkish Fed will hike interest rates as high as officials are projecting, either because inflation will drop back more quickly or... 17th December 2021 · 11 mins read
US Data Response Industrial Production (Nov.) The solid 0.7% increase in manufacturing output last month suggests that shortages are gradually easing. With demand still strong, the latest surveys are still consistent with manufacturing output... 16th December 2021 · 2 mins read
US Housing Market Data Response Housing Starts (Nov.) Single-family housing starts rebounded in November, following a weak four months. While strong new home demand, limited inventory and surging house prices will incentivise builders to increase... 16th December 2021 · 2 mins read
Energy Update Oil risk premium to fall in 2022, but risks abound Our estimates show a fall in the risk premium in the oil price since the emergence of the Omicron variant, as concerns over demand resurfaced. But the risk premium is still large, which adds weight to... 16th December 2021 · 4 mins read
US Economics Update Fed pivot even more hawkish than expected The Fed delivered an even more hawkish shift at the December meeting than we had anticipated, with the pace of tapering doubled and officials now forecasting three rate hikes next year. Reflecting... 15th December 2021 · 3 mins read
Energy Data Response US Weekly Petroleum Status Report Commercial crude oil stocks slumped last week as domestic demand strengthened and exports jumped. The decline in commercial stocks also came as strategic petroleum reserves fell. In the final weeks of... 15th December 2021 · 2 mins read
Europe Commercial Property Update US to outperform in 2022 before rate rises curb returns The rapid bounce-back in the US economy along with still-loose monetary policy will drive continued strong performance in real estate in 2022, when we expect returns to exceed 12%. That would see the... 15th December 2021 · 3 mins read
US Data Response Retail Sales (Nov.) With prices rising sharply last month, the muted 0.3% m/m rise in retail sales values suggests that consumption was little changed in real terms. That won’t stop the Fed from accelerating the pace of... 15th December 2021 · 2 mins read
Asset Allocation Update US REITs may outperform ordinary US equities The recent resilience of US real estate investment trusts (REITs) seems to reflect both easing concerns about the Omicron variant and a net decline in long-dated Treasury yields. Although we expect... 13th December 2021 · 4 mins read
US Commercial Property Data Response Commercial Property Lending (Nov.) Commercial real estate debt recorded its largest gain in November since the onset of the pandemic. And with investment volumes on track for a record-breaking year, we expect lending activity to remain... 13th December 2021 · 2 mins read
US Economics Weekly Pivotal week coming up for the Fed Following Chair Jerome Powell’s markedly more hawkish tone at his recent congressional testimony, markets are braced for the Fed to pivot hard at next week’s FOMC meeting 10th December 2021 · 7 mins read
Global Markets Update We think 10-year US inflation compensation will rise again Even though headline US CPI inflation may now have peaked, we still think long-term inflation compensation could rise a little over the next couple of years. 10th December 2021 · 4 mins read
US Commercial Property Outlook All-property returns set for double digits in 2022 The major change to our forecasts this quarter is that we now see strong demand for assets persisting well into 2022 and pushing yields down further. That is true in all sectors, with retail and... 10th December 2021 · 23 mins read
