SVN Research
Economic Update
January 30, 2025
1
Interest Rate Decision
The Federal Reserve held rates unchanged at 4.25-4.50% at its January meeting, on par with market expectations. Solid labor market performance and somewhat elevated inflation kept officials neutral as they continued to assess the impact of the three consecutive rate cuts made at the end of 2024.
2
Treasury Markets
The current yield on a 10-year US treasury bond is hovering near 5%. While rising long-term yields sometimes reflect an anticipation of higher growth and the higher rates needed to keep the economy from overheating, it may reflect concerns about America’s fiscal trajectory
3
The AI Race and Data Center Demand
A shocking AI advancement by Chinese company DeepSeek upended the US tech market this week as investors reassess the dominance of US tech firms in the AI race. It also sparked debate about domestic data center demand.
4
Business Uncertainty
According to the Atlanta Federal Reserve’s January 2025 Survey of Business Uncertainty, sales revenue growth expectations have risen in recent months but remain more uncertain compared to pre-pandemic averages.
5
Consumer Confidence
US consumer confidence fell at the start of the year, according to the latest reading from the Conference Board. While some deterioration was expected following a holiday season bump, the index, which measures American’s assessment of both current conditions and their six-month outlook, fell steeper than most economists expected.
6
Retail Sales
US retail sales were up 0.4% month-over-month in December, according to the latest data from the Census Bureau. The reading reflects some added momentum to consumer activity to close 2024 and prompted some economists to revise up their growth forecasts for 2025.
7
Logistics Property Rents Drop
US retail sales were up 0.4% month-over-month in December, according to According to new data from Prologis, rent growth for US logistics properties turned negative in 2024, the first drop in 15 years. Rents in the US and Canada fell by 7% on average, steeper than the 5% decline experienced globally. The decline was partly led by slower growth in markets with recently high competition rates, such as Phoenix.
8
Independent Landlord Rental Preformance
According to the Chandan Economics-RentRedi Independent Landlord Rental Performance report, the on-time payment rate in independently operated rental units slipped by 70 basis points (bps) in January and is down 112 bps year-over-year, falling to 85.0%.
9
Beige Book
According to the Federal Reserve’s latest Beige Book, economic activity increased “slightly” to “moderately” in most regions between late November and early December, driven by higher-than-expected consumer holiday spending.
10
New Home Sales
Sales of newly built single-family homes jumped by 3.6% in December to a seasonally adjusted annualized rate of 698k, the highest increase since September and well above market expectations.