The US economy is weak and struggling to recover. With only 88,000 new jobs created in March, it is the worst number since June of last year. The Unemployment rate was reported as 7.6%. That is a 0.01% improvement. However this was due to people leaving the work force and not economic improvement.
Scottsdale, AZ -- (SBWIRE) -- 04/08/2013 -- All of this is happening before there has been any time for the “Sequester” to hit the economy. What this suggests is that the economy is still in difficulty and unemployment will remain in the current range and could get worse.. The “Sequester” will cause job losses ahead. The bond market has reacted positively to this news. The 10 year Treasury, the benchmark for commercial mortgages has fallen to 1.73% as this is being written.
There is a new wrinkle in the monetary landscape. Japan has started to copy our monetary policy. The Bank of Japan has started an aggressive program of asset purchases. These include not only bond purchases but also exchange traded funds and real estate investment trusts. This is different from what our FED has been doing. The FED has been buying bonds and letting the markets put excess reserves into other places. The Bank of Japan is just doing it directly. They have stated that they are setting an inflation target of 2%. They have had some deflation. Proportionately what they are doing is several times larger than what our FED is doing.
The old saying is “Money is the root of evil”. Easy monetary policies like our FED and the Bank of Japan are doing is the root of inflation. At some point in the future there will be inflation. At some point in the future there will be much higher interest rates.
Take advantage of the low-interest rate world of today. Refinance any properties that you can. There will be a change in the future. It could happen fast and surprise everyone. It may be tied to something as simple as confidence.
About Victor Weintraub
Victor Weintraub, a noted economist and author, is president of First Charter Financial Corporation a leading independent mortgage company. First Charter conducts business on a nation wide basis and arranges financing for commercial properties throughout the US. The projects that are handled include office, retail, multifamily, hospitality and specialty properties. Loans amounts range from a minimum of one million dollars up to as large as 100 million dollars. First Charter maintains relationships with large and small insurance companies, retirement and investment funds, regional, national and multinational banks and is very active with capital markets funding sources. Contact First Charter Financial with all of your commercial mortgage needs. Email info@fcfcorporation.com Telephone(480)970 0990