Weekly Report – November 9, 2022

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Highlight of the Week

Some Investors Bet Fed Could Lift Rates to Two-Decade High

  • Investors previously thought that the aggressive rate hikes would quickly cool the economy and slow down inflation
  • Now, after another better-than-expected jobs report, investors are concerned that the Fed will raise rates as high as 6%
  • While some are expecting inflation to slow in Q1 of 2023, many investors are worried that the Fed raising rates to 6% which could very likely send the economy into a significant recession

Rate Curves


Rapid Report:

Abelian Brand Mark

Chinese Developer Sells L.A. Luxury Tower at Steep Discount

  • Chinese Developer Greenland Holding Group sold the tallest rental apartment tower in LA at $504 million for a loss
  • Higher rates, falling rent, and California rent regulations have suppressed values
  • Chinese regulations on the outflow of investor cash have pushed many Chinese firms to sell off commercial real estate projects in past few years. Chinese firms have sold a net $23.6 billion of US commercial properties since 2019

Nobel-Winning Economist Edward C. Prescott Dies at 81

  • Dr. Edward C. Prescott won the Nobel Prize in 2004 alongside Dr. Finn E. Kydland for their paper “Rules Rather Than Discretion: The Inconsistency of Optimal Plans” which argued that policymakers should not stray from long-term goals to address short-term problems
  • His research provided justification for central banks to be independent of elected leaders, while also encouraging them to set interest rates according to rules rather than discretion
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