The Chief Economist: 3Q 2024 U.S. Economic Outlook
The 3Q 2024 U.S. Economic Outlook by BGO, authored by Ryan Severino, offers a detailed analysis of the current state of the U.S. economy, emphasizing the critical role of the Federal Reserve's monetary policy. Despite recent signs of economic resilience, the report warns that the economy is stabilizing rather than accelerating, which could pose risks if the Fed miscalculates its next moves. Severino argues that inflation concerns are overstated due to mismeasured data, particularly in housing, and that the Fed should begin cutting rates soon to avoid unnecessary economic strain. Additionally, the report highlights the growing importance of the labor market as job growth slows and unemployment rises, stressing that the Fed must carefully balance its dual mandate to avoid triggering a recession.
The outlook for commercial real estate (CRE) remains positive, with the sector expected to benefit from the economic shifts. While demand may be tempered by mid-expansion growth, the CRE capital markets are poised to gain from declining interest rates and improving valuations. As transaction volumes remain steady and total returns turn positive, BGO predicts that the CRE sector will continue to thrive despite broader economic uncertainties. The report concludes by advising investors to watch for policy changes and economic indicators closely, as the Fed's actions in the coming months will be crucial in shaping the future of both the economy and the CRE market.
