RESEARCH BRIEF: FEDERAL RESERVE – AUGUST 2019

Brief yield-curve inversion sparks volatility. The short-lived inversion of the 10-year and two-year Treasury yield curve sparked significant financial market volatility as the closely monitored sign of an impending recession delivered a warning alert. Despite efforts by the Federal Reserve and generally strong economic metrics, including steady job creation, low inflation, above-average retail sales growth and elevated small-business confidence, financial markets remain concerned about ongoing trade disputes with China. The flight to safety sparked by the uncertainty has pushed the 10-year Treasury rate to the 1.5 percent range, within 20 basis points of the record low set in July 2016. The convergence of these factors has delivered a unique window of opportunity for commercial real estate investors.

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