🗞 To Cut or Not to Cut

Hey there,

Jackson Hole, Wyoming, August 21 - 23… will we hear talks of rate cuts in September by Powell?

Our guess = no

Despite every other central bank in the world having cut rates meaningfully this year, the Federal Reserve here in the US has held steady.

Cpi ≠ 2% | PPI ≠ 2% | Jobs numbers = ? (weaker with big revisions)

Applying this to housing & multifamily. High rates and high prices are finally starting to cure low supply of houses. This is especially true in the Southeast & Southwest, stalling out home price growth (essentially flat in areas such as Nashville).

As a note: This is backstopping apartment demand, pushing very high occupancy rates.

On the multifamily side, 48% of all multifamily transactions this year have been in the Southeast. This is certainly where we’re seeing a lot of “deals” come across our desk (we don’t buy in the Southeast, though).

Generally, over the last 5 years, the Midwest’s multifamily market (property sales & rent growth) has performed similarly to the Southeast but lagged by a year or so.

With that in mind, it’s likely we’ve reached peak pricing on multifamily assets in the near term locally. We believe it’s likely the Midwest market will see more transaction volume in the not-too-distant future, though it will not be a wave.

The betting market says 70% odds of a rate cut

What are your thoughts, do you think we’ll get a rate cut in September?

Questions always welcome!

Nate & Steven
Rust Belt Capital, LLC

www.rustbeltcapital.com

_Disclosure:
Rust Belt Capital, LLC is not a Registered Investment Advisor. Investing involves risk, including loss of principal. Past performance does not guarantee or indicate future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. While the data we use from third parties is believed to be reliable, we cannot ensure the accuracy or completeness of data provided by investors or other third parties. Rust Belt Capital, LLC does not provide tax advice and does not represent in any manner that any outcomes described herein will result in any particular tax consequence. This is not an offer to buy or sell any security. Offers to sell, or solicitations of offers to buy, any security can only be made through official offering documents that contain important information about investment objectives, risks, fees, and expenses. Prospective investors should consult with a tax, investment, or legal adviser before making any investment decision. Distributions or profitable investments cannot and are not guaranteed. Not intended to be tax advice and should not be solely relied upon to make an investment decision.