TAG Industrial Watch: June 21, 2025

Tariffs are dragging down imports, retail sales are falling before tariffs fully impact prices, total employment is weakening, and a major war just broke out between Israel and Iran (a top 10 oil producer/exporter), yet the Federal Reserve stands pat on interest rates. Industrial investors who have been waiting on the sidelines for the Fed to resume rate cuts (last lowered in December), will have to remain patient, perhaps through the summer. However, just as TAG warned last year, lower rates may not lower rates. With the debt ceiling limit still in place until the president’s “Big, Beautiful Bill” passes, the U.S. Treasury is still handcuffed from borrowing more to finance the federal government’s massive budget deficits. In the meantime, the government is relying on its $332 billion savings fund held at the Fed. However, at the current pace of government deficits, the government’s savings may only last through July.

Notwithstanding a government shutdown, the Treasury Department will be back to its borrowing ways in August, issuing over $100 billion in government debt each month. In doing so, the crowding-out effect comes back into play as the government’s deficits usurp large amounts of capital in the financial system. While Fed rate cuts on bank-to-bank lending will help in theory, without the Fed directly providing liquidity by inflating the money supply to buy Treasuries, interest rates on government debt will likely resume their ascent, pushing up mortgage rates in the process. If nations like China continue to sell off their U.S. Treasury holdings in lieu of gold, pressure on interest rates will only mount. Sooner rather than later, the Fed will likely be forced back into the bond market to prevent interest rates from spiking, but by that time, rates will probably be significantly higher than today. Simply put, now may be the time for industrial investors and owner-users exploring sale-leasebacks to take advantage of the current lending environment before mortgage rates likely move higher.

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I N D U S T R I A L   N E W S

New Study Reveals Real-Time Impact Of
Tariffs On Retail And Manufacturing Costs
GlobeSt.com – June 13, 2025
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Fed Waits On Interest Rate Cuts
Commercial Property Executive – June 18, 2025
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Tariff Damage Looms Without
New Trade Deal, Says Economist
FreightWaves – June 17, 2025
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BRICS: 50+ Nations Now Use Yuan,
Rupee, Ruble, Not US Dollar In Trade
Watcher.Guru – June 8, 2025
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Gold Surpasses Euro As Second-Largest
Reserve Asset: European Central Bank
Mining.com – June 11, 2025
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R E G I O N A L   N E W S

Three Lewisville Warehouses
Included In $84.25M Portfolio Trade
Connect CRE – June 13, 2025
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CanTex Capital Acquires 266,200-Square-
Foot Industrial Facility In Dallas
REjournals – June 12, 2025
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Stream Realty Partners Breaks Ground On
384,509 SF Industrial Project In South Houston
REBusiness – June 19, 2025
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Texas Instruments Earmarks
$60B for US Manufacturing
Commercial Property Executive – June 19, 2025
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Opus Breaks Ground On Class A
Speculative Industrial Project 
Mile High CRE – May 5, 2025
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