Potential Risks Investors Should Monitor

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​

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