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