Fed Hikes • 'Pain' Necessary • Rent Updates

September 21, 2022 | Hoya Capital

Fed Hikes • 'Pain' Necessary • Rent Updates Real Estate Daily Recap Sep 21 Written By U.S. equity markets finished sharply lower Wednesday after the Federal Reserve initiated another "jumbo" 75-basis-point interest rate hike while Chair Powell reiterated that economic "pain" was necessary to cool inflation. Dipping back below the 'bear-market' threshold of 20% declines, the S&P 500 dipped another 1.7% today to its lowest level since July while the tech-heavy Nasdaq deepened its drawdown to 30%.

Real estate equities were among the better performers as longer-term interest rates pulled back from fifteen-year highs following the Fed rate decision. The Equity REIT Index declined by 1.6% today. Fed Chair Powell's insistence that the U.S. economy remains "strong and robust" was perhaps the most hawkish of comments, clashing with data showing that the U.S. economy may record a third-straight quarter of GDP contraction in Q3, which has only occurred once since 1975.

Apartment Income (AIRC) was among the better performers today after providing an upbeat operating update amid recent signs that the rate-driven housing market cooldown is beginning to moderate rent growth. AIRC noted that it achieved blended rent growth of 14.0% in August. Real Estate Daily Recap U.S. equity markets finished sharply lower Wednesday after the Federal Reserve initiated another "jumbo" 75-basis-point interest rate hike while Chair Powell reiterated that economic "pain" was necessary to cool inflation.

Dipping back below the 'bear market' threshold of 20% declines, the S&P 500 dipped another 1.7% today to its lowest level since July while the tech-heavy Nasdaq 100 deepened its year-to-date drawdown to 30%. Real estate equities were among the better performers as longer-term interest rates pulled back from fifteen-year highs following the Fed rate decision. The Equity REIT Index declined by 1.6% today with 17-of-18 property sectors in negative territory while the Mortgage REIT Index slipped 0.9%.

While the 75-basis-point rate hike was consistent with expectations, Fed Chair Powell's insistence that the ...