TAG Industrial Watch: April 6, 2024

With the money supply deflating for the first time since the Great Depression in 2023 and the Federal Reserve preparing the markets for rate cuts, most analysts expected to see a decline in interest rates and a slowdown in prices in 2024. However, as TAG Industrial forecasted, the opposite has prevailed so far. Commodity prices across the board had one of their best quarters ever in Q1, rising by 11.6 percent according to the CRB Commodity Index. Given their impact on production costs, rising commodity prices indicate high consumer prices down the road. This past week, the price of gold (which often serves as an inflation bellwether) hit a record high of $2,300, just as interest rates on the closely watched 10-year Treasury touched 4.4% for the first time since November.

Given America’s growing mountain of debt, interest rates are likely to continue their ascent at least until the Fed reduces its benchmark rate charged between banks (however the long-term consequences of which are probably both higher prices and market rates). For industrial investors, the promise of rate cuts by the Fed should not be interpreted as more access to credit at lower rates. As in the case of the 2008 Housing Crisis, if banks continue to struggle they may not pass on lower rates to borrowers. In other words, there may not be a better moment this year than today for industrial investors to access credit.

I N D U S T R I A L   N E W S

Rising Treasury Yields Pose A Test For Richly Valued US Stocks
Reuters  – April 3, 2024
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Commodity Prices Post One Of Their
Best Quarters Ever – What’s Next?
FXEmpire – April 1, 2024
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More Construction Projects Are Being
Delayed Or Abandoned Entirely
Bisnow – March 12, 2024
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UPS To Close 200 Sites, Expand Distribution
Centers In Cost-Cutting Moves
CoStar – March 29, 2024
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CSX Completes First Diverted Cargo Shipments
On New Rail Line For Port Of Baltimore
CNBC – April 4, 2024
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R E G I O N A L   N E W S

Google To Build $1B Data Center In Kansas City
Connect CRE – March 21, 2024
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Vacancy To Vitality: Chicago’s Industrial
Market Poised For Rebound
REjournals – March 26, 2024
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EastGroup Properties Breaks Ground on 244,000
SF Industrial Project In Denton, Texas
REBusiness – April 3, 2024
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Chicagoland Industrial Market Remains Resilient
REBusiness – March 28, 2024
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Top 5 Emerging Industrial Markets In 2024
Commercial Property Executive – March 20, 2024
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