Bisnow Reports
CBRE's Richard Barkham
Oct 9, 2023
CBRE's Richard Barkham, global chief economist, discusses the US economy's resilience, inflation's impact on interest rates, cap rates and IRRs stabilization trend, low retail vacancy rates, and the effects of global turmoil on commercial real estate and cross-border investments.
26:52
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Quick takeaways
- CBRE has moderated its recession prediction but still expects weaker growth in Q4 and Q1 due to factors such as the impact of the CHPS Act and the IRA Act, prompt action by the Fed and FDIC, fiscal stimulus, and low mortgage rates.
- Rising interest rates and oil prices could still pose a pressure on the US economy, affecting real estate values, and the economist predicts that the Fed may have overtightened by Q2 of next year.
Deep dives
Resilience of US Economy and Outlook for Commercial Real Estate
Despite predictions of a recession in 2022, the US economy has shown resilience. CBRE has moderated its recession call but expects weaker growth in Q4 and Q1. Factors contributing to the economy's resilience include the impact of the CHPS Act and the IRA Act in boosting manufacturing and construction activity, prompt action by the Fed and FDIC in stabilizing the banking sector during times of stress, fiscal stimulus from ballooning government deficits, and consumers shielding themselves from rising interest rates through low mortgage rates. However, rising interest rates and oil prices could still pressure the economy.
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