By the time Q1 2019 came to a close, most economic statistics had stabilized after a tumultuous 2018. In the quarter, the stock market climbed 16%, GDP growth cleared 3%, job growth maintained a healthy pace, inflation remained low and all signs from the Fed suggested that they would hold off raising the Fed Funds rate. Everything was oddly in balance… what could go wrong?
Since peaking in late April, the Dow has fallen 1,260 points – 4.7% – as the threat of a trade war with China has escalated with little leeway from either party. Fears that new tariffs will hurt both economies and slow global growth pushed the 10-year Treasury rate to 2.373% in late March – the lowest since late 2017. How has this volatility affected the property sales market? How have cap rates moved given the drop in interest rates? And what about the persistently odd inversion in the 5-year/10-year Treasury rates?
Additional topics of discussion include:
- Where are we in the cycle? Are we at full employment?
- What surprises did we see in the quarter?
- Are debt levels dangerously high?
Watch the First Quarter 2019 Capital Market Briefing with REIS Senior Economist Barbara Byrne Denham to get these answers and more.