Treasury rates increasing, rent inflation not sustainable

<p><strong>Snapshot report</strong></p> <p>Stronger-than-anticipated retail sales boosted the Ten-year Treasury up 11 basis points to 1.6 percent.</p> <p>Term SOFR is still trading slightly higher than five basis points, while BSBY is at six, and one-month LIBOR at 8.5.</p> <p>Two-year government Treasuries have moved up 22 basis points in the last month, and increases will be frequent as tapering and interest rate increases become more likely around the end of 2022.</p> <p>Our Capital Markets Report gives a full review of what’s happening as rates increase, flattening out the short end of the curve.</p> <p>Across spreads, volume at Thirty Capital continues to be very strong and the market is aggressive. As rates increase, exit costs decrease slightly.</p> <p>On the policy front, the debt ceiling bill passed last Thursday, but when it comes to tax policy, a lot of it is in limbo.</p> <h1>Rent inflation not sustainable</h1> <p>Thirty Capital CEO Rob Finlay commented on rent inflation, which is the highest it’s been in a long while. Rob says there’s no way the economy can support a 20 or 30 percent increase in rents, as it’s just not accessible for renters.</p> <p>Meanwhile, home start stats will come out this week. Currently, home builders cannot keep up with demand as they just don’t have the supplies or the labor.</p> <p>However, Rob and his team recognize that inflation isn’t transitory, so this is creating a push-pull scenario, with commercial real estate professionals wondering if a recession is coming, or when the Fed will raise rates.</p> <p>The analysts also explore what’s happening with the end of LIBOR and how things might play out. Surprisingly, a lot of deals are still being created in LIBOR, and the team discusses examples and what will happen when LIBOR ends.</p> <p>Listen to the in-depth version of the show for all the discussion and analysis! And follow Rob on <a href= "https://twitter.com/FinlayRob">Twitter</a> and <a href= "https://medium.com/@robfinlay">Medium</a></p>