There are a number of mitigating factors keeping a lid on the 10-Year Treasury Note yield: “monetary offset,” global yield differentials and the possibility that Trumpflation may disappoint in actuality. Thus far, the legislative accomplishments of President Trump and a unified Congress have been underwhelming. After demonizing Obamacare for the past seven years, Speaker Ryan and the Republican House of Representatives couldn’t even muster enough partisan votes to bring the hastily prepared American Health Care Act up for vote, blocked by hard-core conservatives on their own side of the aisle. Aside from ideology, there was apparently a procedural rationale for trying to enact AHCA before taking on tax reform. AHCA would have reduced the deficit for the current fiscal year

Not surprisingly, politics dominated the start to the New Year. The optimism that permeated the investment/corporate community after the election of Donald J. Trump managed to survive (i) an ill-fated immigration ban, (ii) a half-assed attempt to “repeal and replace” the Affordable Care Act and (iii) a never-ending investigation into the potential collusion between members of the victorious Trump campaign and Russia. Readings of economic data in the US have been steadily improving leading up to the election, which improvement continued in First Quarter. As a result, implied probabilities of an increase in the federal funds rate steadily climbed intra-quarter; when the Bureau of Labor Statistics reported an addition of 235,000 in February non-farm payroll employment compared to estimates of

Reviewing the returns of the various property types in the Index subsequent to the election, it is clear that the duration of the lease term was the most important factor in determining the relative winners and loser. However, there is a ceiling to the reflation trade for even the most ardent fan of Donald Trump and a unified Republican Congress; otherwise, active REIT managers can just shorten the duration of their portfolios and outperform for 2017 and beyond. A number of mitigating factors come to mind: “monetary offset,” global yield differentials and the real possibility that Trumpflation may disappoint in actuality. It is interesting to note that for the Staff of the FOMC, the risk to their projections for real

A Huge Win for the Donald. 2016 has turned out to be annus horribilis for establishment politics and politicians as well as pollsters who have repeatedly underestimated global populist discontent, which discontent found an unlikely champion in the US in a billionaire prone to tweeting late into the night. Perhaps even more unexpected than the election results was the reaction of the capital markets subsequent; huge losses in the futures markets were quickly reversed and all facets of a “reflation” trade came on display: small caps, cyclicals and financials up, bond yields up and the dollar up. While the President elect would probably like to take all the credit for the animal spirits awakened, in reality, the US economy was

Macy’s shook the retail real estate world last August, announcing plans to close approximately 100 full-line stores in early 2017 as department store sales continued their secular drift on-line, away from apparel (electronics and experiences) and into other more nimble competitors (fast fashion). Macy’s revealed specific locations slated for closure this week following another disappointing holiday selling season and weakening outlook, with the fourth quarter result poised to be its ninth consecutive quarter of comparable sales decline. This unenviable track record follows a similarly consistent though positive prior years’ sales trend, with 2013 a particularly strong year which marked Macy’s fourth consecutive year of positive comparable sales growth…highlighting the difficulties larger retailers face adapting to a quickly shifting retail landscape,