Rate and Market Update

Inflation data continues to throw the market for a spin, showing signs of a strong economy despite lingering concerns. Last week’s PCE and Q1 GDP readings, among several other variables, are continuing to test the markets’ bets on the future. GDP was expected to grow 2.5% and it came in at 1.6% annualized, while PCE came in 0.3% over expectations at 3.4% annualized, casting fears of stagflation in the economy. The service sector was the biggest contributor to the higher than anticipated personal consumption expenditures index. April’s Core PCE reading, which excludes food and energy from the print, however, came out at 2.8% annualized, 0.1% higher than the forecast but mirroring last month’s print. 

The 10 Year treasury began the year at 3.86%, rising to 4.17% by the end of January and subsequently climbing up to 4.7% last week, falling back down to “4.7%” as of April 30th, 2024. This 85-basis point swing reflects greater volatility and a lack of consensus in the market as to where long-term inflation is truly headed. Investors and lenders alike are finding difficulty pricing risk in this climate.

Rate Sheet

Click below to download our latest Rate Sheet

The End of Bank Term Funding Program

In efforts to avoid further banking distress after the 5-day, multi-bank collapse of SVB, FRB, & Signature Bank in March of 2023, the Fed created a new short-term liquidity backstop known as the “Bank Term Funding Program” to aid bank balance sheets and liquidity. This new funding program reached $167B before coming to an end on March 11^th, 2024, leaving market participants in wonder as to who would absorb the billions of losses on these underwater securities. 

Blackstone's Back

In the beginning of the month, Blackstone entered into a $10B deal to purchase 76 residential communities concentrated in coastal cities on the East Coast. The all-cash purchase represents a 25% increase over seller AIR Communities' share price. Based on outstanding debt, equity, and the implied net operating income, this deal equates to roughly a 5.8% cap rate.

Investors big and small look to institutions such as Blackstone for forward guidance, and this transaction represents a notable shift in sentiment and risk-on bets from the world’s largest alternative asset manager.

Featured Listings

Recent Closings

Important Dates