TSX:AX.PR.E - Post by User
Comment by
Torontojayon Aug 05, 2024 10:29am
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Post# 36164530
RE:Relationship between REIT Valuation and Risk Free Rate
RE:Relationship between REIT Valuation and Risk Free Rate
Frankie10 wrote: Money printer about to go brr.
Canadian 10Y down from high of nearly 4% to now 3%.
US 10Y down from high of 4.7% to now 3.7%.
With respect to valuation, the relationship between REITs and the risk free rate is clear -- we all saw what happened when cap rates went up...
Ladies and gentlemen, grab your popcorn - you are now watching the Samir Manji show. Let's see if he fumbles the ball or puts on a master class of a show.
They are a long time away from printing money. The Fed has their hands tied. They still have to do QT which they have telegraphed will continue until the end of year. Bank reserves has to be approximately 11% of the money supply as it was in pre-covid times. Printing more money will ignite inflation fears which brings me to my next point. The Fed has to either choose inflation or a recession and we know that a recession is the cure to the disease.
The money printing doesn't begin until rates hit rock bottom which could still be sometime away.