The Chief Economist: The More Things Change…

In this latest edition of The Chief Economist, BGO’s Ryan Severino examines persistent inflation, unpredictable trade policy, and the positive momentum in commercial real estate (CRE) performance. With limited government data available due to the ongoing shutdown, BGO focuses on what remains observable — steady but contained inflationary pressures driven by tariffs, alongside data distortions such as the owners’ equivalent rent (OER) anomaly. Despite concerns, BGO maintains that inflation is rising only gradually, consistent with its long-held outlook that policy shifts are creating temporary volatility rather than structural instability.

On the CRE front, BGO highlights that the cyclical pattern of total returns is unfolding as predicted: once rate hikes paused, returns turned positive, and with the Fed expected to cut another 25 basis points, performance continues to accelerate. Industrial, multifamily, and retail assets remain strong, while office continues to improve more slowly. BGO reiterates that declining rates are reinforcing capital market confidence and supporting appreciation returns. The firm’s view remains firm — despite short-term uncertainty, CRE fundamentals and cyclical recovery are advancing on track.

Read the full article here: The More Things Change…