Whither interest rates?

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Literally every day, I ponder the following questions:

  1. When will the Fed stop buying bonds and allow interest rates to rise?, and
  2. When rates rise, how much will they rise by?

If you believe that the Fed is going to keep stimulating the economy for several years and/or that, when it stops, rates won’t rise by much, then you’re bullish on 5+ unit deals.

If you believe the Fed will stop imminently and / or that rates will jump sharply when it does, then you’re not touching 5+ unit deals with a ten-foot pole unless you have a strong value-add strategy.

Where do you come down?

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