MARKET
Source : As of December 29 , 2021 ; January 31 , 2022 ; February 28 , 2022 ; March 31 , 2022 Indices referenced .
products , of which Russia and Ukraine are major suppliers . 3 . Different and competitive regional blocs will emerge
While prices for energy and commodities seem to have stabilised after the initial spikes , supply disruptions and heightened perceptions of scarcity will likely cause further inflationary pressure .
This build-up in inflationary pressure prompted the US Fed to raise the benchmark policy rate by 25 basis points ( bps ) in March , the first-rate hike since 2018 . Currently , investors are expecting the Fed to raise rates by 125 bps over the year , with another 50 bps in May .
Inflation concerns aside , Russia ’ s prolonged war in Ukraine has raised geopolitical risks . The war has reinforced ties among Western countries — both on security and ideological grounds — on the back of perceived threats from Russian aggression . Regardless of the outcome of the Russia-Ukraine war , it is likely that :
4 . The search for safe havens will heighten , which benefits REITs
REITs Outlook Still Positive
Despite concerns about higher interest rates and inflationary pressures and their impact on REITs ’ performance , we maintain our positive view of global REITs .
The Russia-Ukraine war has affected supply and demand fundamentals , but the global economy remains on its postpandemic recovery track , which benefits the real estate sector .
1 . Defence spending as a proportion of Gross Domestic Product will rise
2 . Deglobalisation trends will accelerate with an increasing emphasis on security and certainty of supply chains and manufacturing bases over efficiency
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