Hot Inflation • Stocks Plunge • Shelter Effects Hit

September 13, 2022 | Hoya Capital

Hot Inflation • Stocks Plunge • Shelter Effects Hit Real Estate Daily Recap Sep 13 Written By U.S. equity markets plunged Tuesday after CPI data showed an unexpected acceleration in inflation last month, likely keeping the Federal Reserve committed to aggressive monetary tightening over the coming months. Posting its steepest single-day decline since the depths of the pandemic in mid-2020, the S&P 500 dipped by 4.3% today - erasing its best four-day gains since June.

The Dow plunged by more than 1,200 points while the US Dollar Index surged to fresh two-decade highs as investors priced in additional Fed rate hikes. REITs and domestic-focused equities were relative outperformers. Peak Inflation? Not quite yet. Consumer prices unexpectedly accelerated in August across both the headline CPI and Core CPI metrics driven by largely by the delayed recognition of Shelter Inflation, which had been understated by the lagging CPI indexes over the past 18 months.

Perhaps overlooked in today's data was that CPI excluding-Shelter actually posted its steepest decline since the pandemic, dipping 0.36% following a 0.29% decline in the prior month - suggesting that "real-time" inflation is indeed decelerating even as headline metrics suggest otherwise. Real Estate Daily Recap U.S. equity markets plunged Tuesday after CPI data showed an unexpected acceleration in inflation last month, likely keeping the Federal Reserve committed to aggressive monetary tightening over the coming months.

Posting its steepest single-day decline since the depths of the pandemic in mid-2020, the S&P 500 dipped by 4.3% today - erasing its best four-day gains since June - while the tech-heavy Nasdaq 100 plunged by 5.5%. The Dow plunged by more than 1,200 points while the US Dollar Index surged to fresh two-decade highs as investors priced in additional Fed rate hikes. Real estate equities were relative-outperformers today, but the Equity REIT Index was still lower by 3.8% today with all 18 property sectors in negative territory while the Mortgage REIT Index ...