Hi, I’m Stewart Heath, CEO of Harvard Grace. Let’s talk about interest rates and inflation today. I have tagged a couple of articles here from Wall Street Journal, and Barron’s about what is going to happen with interest rates in 2022.
The consensus will raise fed funds rates in the fourth quarter of next year. Twice next year, where we might go as high up as a half a percent rate. But then others, you know there is opposing opinion, it will not happen at all. The fed may carry and be slow to react. Let us remember next year is an election year. The problem is the fed needs to raise interest rates to keep inflation tamped down. That’s generally, the way it’s done and let’s face it inflation is running rampant right now. There is some talk those things will settle down in the first quarter of next year, but that remains to be unseen. None of us are seeing it at the fuel pump and of course, energy prices impact the cost of everything, from your brand-new Tesla to a loaf of bread. As a real estate investor, interest rates and inflation impact us dramatically cause inflation will dictate how we write our leases going forward because the real estate investor must investigate the future now on the commercial real estate. Then of course, interest, most of us borrow a great deal of the purchase price of our investments. So, interest rates have a significant impact on that.
Anyway, look those up. I would love for you to engage with me on this. Let me know what you think interest rates are going to do next year and the year after that. Let us hear from you. Thanks for watching.
Resources:https://www.barrons.com/articles/interest-rates-2022-outlook-federal-reserve-51637969491 ; https://www.wsj.com/articles/high-inflation-falling-unemployment-prompted-powells-fed-pivot-11638786601