⭐️ 1. Market Moves

Overview: Weak jobs complicate Fed policy, CRE distress remains high at 11.1%, and private equity targets housing, industrial, retail, and data centers.

1. Complicated Jobs Reports: A weak February jobs report complicates Fed policy decisions as softening labor markets collide with inflation still above the 2% target.

➡️ Why it matters: Labor weakness increases probability of rate cuts ahead.

2. 11.1% Special Servicing: CRE distress remains elevated with special servicing at 11.1%, the second-highest since the GFC, as refinancing pressure and office weakness continue.

➡️ Why it matters: Distress cycle likely persists through 2026 before gradual recovery.

3. Real Estate Private Equity: Real estate private equity enters 2026 cautiously optimistic, with disciplined capital deployment focusing on rental housing, industrial, retail, and emerging sectors like data centers.

➡️ Why it matters: Selective capital deployment will define the next CRE cycle.

📈 2. Chart to Watch

Warsh advocates faster Fed balance sheet reduction via QT, though evidence since 2022 suggests runoff has modest impact under today’s ample-reserves framework.

➡️ Why it matters: ​Balance sheet policy may influence rates less than markets expect.

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💰 3. Capital To Know

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