Conning ConnText Podcast: Challenges to Economy Continue but U.S. Remains Bright Spot Amid Troubled Global Times
July 29, 2022
As the Fed Seeks to Balance Inflationary Fight and Recession Concerns, Real Estate Investors Also Take Market Pulse to Navigate a Careful Course
HARTFORD, CT – July 29, 2022 — Leading global investment management firm Conning has posted its latest Conning ConnText quarterly podcast which examines how the Russian assault on Ukraine, 40-year-high inflation and other global and domestic policy events are hampering U.S. economic growth. However, the U.S. remains in better shape than much of the rest of the world and there are reasons to remain optimistic about economic conditions. The podcast also discusses current trends in real estate and the inflationary impact.
Rich Sega, Conning’s Global Chief Investment Strategist and host of the podcast, said “when inflation remains elevated for an extended period it can become embedded into expectations.” This is prompting the U.S. Federal Reserve to raise its Fed Funds rates.
Sega added that lack of policy progress on energy and proposed federal government spending may keep GDP growth below potential in the near future. The strong U.S. dollar has become a haven for global investors, however, conditions that will likely remain if U.S. rates continue upward. The U.S. may “avoid a deep recession and could escape one entirely if the central bank doesn’t overreach,” Sega said.
Real estate is considered by many to be an inflation hedge, but the sector has a closer correlation to GDP and employment, said Tom Cloutier, Sega’s guest on this quarter’s podcast. He is a director in Conning’s Structured Credit Research & Trading team and a CMBS expert.
“Real estate tends to perform best when prices are increasing at a moderate pace in response to healthy economic growth,” Cloutier said, “as property owners can more easily raise rents when a growing economy creates demand for commercial property space.”
Market conditions today are more challenging to economic growth, which in turn may limit growth potential in real estate, Cloutier said, but he noted several opportunities that may be a good fit for some investors.
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Conning (www.conning.com) is a leading investment management firm with almost $191 billion in global assets under management as of June 30, 2022.* With a long history of serving the insurance industry, Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
*As of June 30, 2022, represents the combined global assets under management for the affiliated firms under Conning Holdings Limited and Cathay Securities Investment Trust Co., Ltd. (“SITE”). SITE reports internally into Conning Asia Pacific Limited but is a separate legal entity under Cathay Financial Holding Co., Ltd. which is the ultimate controlling parent of all Conning Holdings Limited controlled entities.
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