The United States Federal Reserve has raised interest rates by 25 basis points to a target range of 3.75% to 4.00%, its first hike since July 2023. It also signalled that another hike could come before the end of 20261. The decision comes against persistently elevated inflation, with higher energy prices adding to the pressure alongside resilient economic activity and investment.
I have covered the effects of higher interest rates before, here and here.
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In general, higher rates can put pressure on interest-rate-sensitive assets such as bonds and real estate investment trusts (REITs), while also affecting selected equities through higher financing costs and valuations. Cash and short-term government securities, on the other hand, can benefit from higher yields.
REITs Issues…Again
This has got to be one of my nth posts on REITs.
As a leveraged asset class, REITs tend to
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