Hanson Capital Weekly Newsletter #1– March 20 – 27: Market Moves & Investor Insights

Market Insights: Fed Holds Rates Steady Amid Rising Economic Uncertainty

While markets adjust to this week’s latest news and uncertainties, let’s take a quick look back at last week. Last Wednesday, the Federal Reserve announced it will be holding the federal funds rate at 4.25-4.5%—a cautious but expected move. However, the Fed lowered its forecast for GDP growth to 1.7% for the year (down from 2.1% in December) and raised its inflation outlook to 3% (up from 2%).

Key Takeaways:

• Increased Risk of Slowdown: 18 of 19 policymakers now see increased downside risk to GDP.
• Unemployment Concerns: 11 policymakers expect unemployment could rise to 4.5% this year.
• Tariff Pressure: Fed Chair Jerome Powell highlighted that tariffs are driving higher inflation expectations—but said the effect may be transitory.

Market Reaction: Stocks initially surged on the news, but bond purchases also increased, signaling  a market confused with some concern about growth.

Investor Takeaway: With growth slowing and inflation still elevated, the Fed’s cautious tone signals that rate cuts may be delayed. Investors should focus on assets with strong cash flow and pricing power to weather this environment. This is ok it means we have time to accumulate deals where we can force appreciation and the eventual rate cuts will be a tailwind that we aren’t relying upon but will happily take.

Investor Concept of the Week: Stagflation – Why It Matters for Real Estate

Stagflation refers to an economic environment where growth slows, but inflation remains high—a rare but challenging scenario for investors.

Why It Matters:

• Higher inflation increases operating costs and reduces purchasing power.
• Slower growth pressures asset valuations and rental demand.
• Debt costs stay high if central banks prioritize controlling inflation over stimulating growth.

Investor Move: In a stagflationary environment, look for investments in sectors with strong pricing power (e.g., industrial and essential retail) and assets with low capital expenditure needs.

Final Thoughts

While the headlines might seem uncertain, this is exactly the type of market where small-bay industrial real estate thrives. Stable cash flows, low tenant turnover, and the growing demand for last-mile logistics make this asset class resilient even when economic conditions soften.

At Hanson Capital, we’re strategically positioned to take advantage of these conditions—targeting properties where we can drive value through smart management and lease-up strategies. Economic uncertainty creates opportunity for those who know where to look.