Real estate investment trusts (REITs) are a go-to option for investors seeking exposure to real estate. With their impressive long-term returns, liquidity, high dividend yields, and ability to boost diversification, REITs have garnered widespread appeal among investors.
However, given that REITs don’t fare as well in a high interest rate environment, the Fed’s fight to tame inflation over the past two years has been a significant headwind for the group. Now, with a cooling inflation trend confirmed by June’s unexpectedly mild Personal Consumption Expenditures (PCE), investors this week are expecting Fed Chair Jerome Powell to provide some strong hints about an upcoming interest rate cut in September.
