The Chief Economist: Are We There Yet? An economic update on the state of the U.S. economy
Welcome back readers to our latest edition of The Chief Economist. I'm Ryan Severino, CFA, the proud author of this newsletter presented by BGO , and as always, I'm here to share my insights and perspective on the forces shaping the economy. Let's dive right in!
“Are we there yet?” A question asked myriad times on myriad road trips. We’ve been on a road trip of sorts over the last two years, in the economy. While inflation ran hot for a time, it has cooled significantly since peaking in June 2022. Conversely, the labor market tightened dramatically after the pandemic, but has loosened somewhat during the same timeframe that inflation cooled. That brings us to the point where the balance of risks in the Fed’s dual mandate has shifted, and likely reversed. The data released last week strengthen this view. While that likely won’t cause the Fed to move rates when it meets later this month, it increases the probability of a first rate cut this year, as soon as the September Fed meeting. If so, that could have notable ramifications for the commercial real estate (CRE) market.
