Dr Chandan's Lead Indicator : "Rising Interest Rates: The Threat Hasn’t Gone Away"
Commercial Observer reports: In his latest Lead Indicator column entry in the Commercial Observer, Real Capital Analytics Global Chief Economist Dr Sam Chandan speaks to the issue of a rising risk-free interest rate, and its potential effects on commercial real estate. He immediately points out that recent events have mitigated a previous rise in long-term Treasury rates. After months of turmoil in the Middle East, the largest earthquake on record devastated the world’s third-largest economy, and now a third European euro-club member on the brink of asking for a bailout, the world’s investors have taken shelter in stable US Treasuries.
This flight to safety has pushed the 10-year rate down by nearly 50 basis points since the start of February. However, Dr Chandan states that, “…investors should be careful to avoid falling into complacency. While an abrupt and unexpected confluence of globally significant events has bridled the rise in long-term treasuries, an environment of rising interest rates may quickly reassert itself once macro conditions normalize.”
For why a sudden change in risk-free rates is possible in the near-term, and what effects such an increase may precipitate on commercial real estate markets, please see Dr Chandan’s full article on the Commercial Observer's site.
View the full article on Commercial Observer: Dr Chandan's Lead Indicator : "Rising Interest Rates: The Threat Hasn’t Gone Away"
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Posted by: Nina Turner