General Optimism in the Market

<p>The economy has a positive vibe about it this week, with more optimism from the Fed. People across the country are starting to travel and get out more after more than a year of COVID-19.</p> <p>A lot of strong economic data was released in the last week, headlined by a GDP of 6.4 percent year over year. Economic data due this week includes non-farm payrolls and unemployment reports.</p> <p>However, concern about unchecked inflation remains. Says Analyst Jason Kelley: “Everyone knows inflation is coming. It’s just how hot does it get?”</p> <p>Experts anticipate that the Fed will intervene, but nothing has been hinted at so far.</p> <p>“I think that's probably the first step before we start seeing short-term rates rise,” notes Jason. “They'll have to start tapering because they're really driving down that residential market now with the $120bn bond buying every month.”</p> <p>Inflation is already present in the residential property market, and was running at about six percent in February, as market activity jumped.</p> <p>In fact, the housing sector is hot, and new home sales and housing starts have reached their highest levels since 2006. The supply of homes available for sale is down to the lowest level since the 1970s, says Analyst Bryan Kern.</p> <p>On the floating rate hedging side, activity is very busy. Analyst Jay Saunders points to the fact that variable rate products are popular</p> <p>Will this positive activity and outlook lead to an increase in investor demand? Analyst Jeff Lee says this remains to be seen.</p> <p>“I think the general optimism from last week's Fed meeting, it's kind of to be seen. The whole trend and theme is long-term. Once that starts to trickle back, we might be seeing more of the retail, office, and hospitality properties contribute more,” Jeff observes.</p>