Fed Hawks Take Center Stage

But inflation data remain tame

Highlights

• Treasury yields and rate hike odds rise amid the hawkish Fedspeak on “sticky” inflation… 

• … but with rents falling in real time and CPI ex. shelter is running at 1.9% YoY, this narrative will not have legs 

• We know that markets mean revert, and the math has significant implications for pricing 

• For housing to be affordable again interest rates need to drop by 200 basis points