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:
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
