Video Update - What Real Estate Investing Looks Like After The Election

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In the wake of Donald Trump's larger-than-anticipated victory in the recent election, financial markets are facing both opportunities and challenges. While initial market sentiment appears overwhelmingly positive, with expectations of lower interest rates, reduced taxes, and pro-growth policies, several crucial factors warrant careful consideration.

Economic Policy Implications

The anticipated implementation of tariffs represents a significant economic consideration. While there's merit in addressing issues like intellectual property theft in trade relations with China, the broader implementation of tariffs – including those on friendly trading partners – historically correlates with increased inflation. This pattern has consistently led to negative impacts on global trade and elevated international political tensions.

The bond market has already begun pricing in these developments, showing notable weakness with a 5.44% decline over the past quarter. The long-term Treasury bond market has experienced a particular downturn, falling 5% over the last quarter and nearly 2% in the past month. This trend, coupled with the Federal Reserve's recent quarter-point rate cut, suggests a complex monetary landscape ahead.

Federal Reserve Dynamics

While the Federal Reserve maintains its cautiously optimistic stance on inflation and economic indicators, questions arise about the potential influence of the incoming administration on monetary policy. Despite Jerome Powell's tenure being secure until 2026, historical precedent suggests the possibility of presidential pressure for lower rates, given Trump's well-documented preference for accommodative monetary policy.

Commercial Real Estate Sector Analysis

The office market is showing encouraging signs, particularly in key urban centers. Midtown Manhattan is experiencing a revival with increasing leasing rates and successful space absorption. Los Angeles presents a mixed picture, with improvements west of downtown while the downtown and eastern areas continue to face challenges.

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