Fed Official Warns the Risk of Higher Inflation

Join TradeAlgo's Free Live Trading Session ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Fed Official Warns the Risk of Higher Inflation Wall Street got a shot in the arm after the market closed yesterday, when FedEx soared about 15% after reporting strong guidance. The delivery company is often considered as the barometer of economic growth, so its bullish outlook brings extra credibility to the soft landing thesis. At the same time, consumer confidence was lower for business conditions, the job market and incomes. This is no different than we’ve witnessed in the past. Economic data paints a picture of a strong economy, but consumers don’t feel like it. Even Fed Chair Jerome Powell was puzzled on why consumers were so down on the economy. Speaking of the central bank, Fed Reserve Governor Michelle Bowman said she sees a risk of higher inflation. Why? She pointed to several potential catalysts. Supply chain crunch during the pandemic has eased up, so the economy may not benefit from improving supply to keep prices lower. The growth in labor force participation has slowed in recent months, so we will not enjoy the advantage of extra employees to limit wage gains as much. Moreover, the USA has tightened up its immigration which could reduce the number of available employees. So, she doesn’t believe that it’d be appropriate to cut interest rates very soon. - “Reducing our policy rate too soon or too quickly could result in a rebound in inflation, requiring further future policy rate increases to return inflation to 2% over the longer run,” she said. Fed Reserve Governor Michelle Bowman (Photo: Zach Gibson/Bloomberg) General Mills and Paychex will report their earnings this morning, while Micron Technology will release its quarterly result after the bell. Micron is an important earnings report because of its exposure to AI chips. This Friday, we will get a new inflation reading — May’s personal consumption expenditures price index. Top REIT Stock: Collect Rents As A Landlord Of One Of The USA’s Largest Warehouse Owners In 2005, Amazon debuted their Prime memberships and changed the game forever for e-commerce. Over the 16 years since, people have come to expect increasingly faster shipping times. And those fast shipping times require warehouses. Lots of warehouses. And guess who owns lots of warehouses? Yes, that’s today’s stock pick, and the company is one of the major REIT players in warehouses. Today’s Pick: Industrial Logistics Properties Trust (ILPT) Industrial Logistics Properties Trust owns 411 properties across the country at prime locations near airports and shipping hubs. Its occupancy rate is 99%. Even better, they own a large slice of some of the scarcest industrial land in the country -- Hawaii. You can collect a slice of rent as an investor in this company and enjoy the boom in demand for warehousing. (Source: Industrial Logistics Property Trust) This company is an unusual one because about half of its properties are located in Hawaii. It is a marvelous niche because Hawaii doesn’t have much land. Sure enough, 28% of its annualized rental revenues came from Hawaii. Even better, demand is driving rents up. Rents have increased for 10+ consecutive years. Rental rates soared 38.3% in the first quarter of 2024. (Source: Industrial Logistics Property Trust) The company rents to some of the biggest e-commerce brands in the world. They highlight that 77% of revenue comes from investment grade rated tenants. (Source: Industrial Logistics Property Trust) Bottom line: Industrial Logistics Properties Trust offers a way for investors to enjoy the potential upside of high warehouse demand. And the prime industrial property sets a hard floor on the value of the company. The company’s stock price is at around $3.5 while its book value per share is $9.77. The company holds $4 billion in debt. That’s the risk. At the same time, its debt is tied up in lands and warehouses where they are quite valuable. You could buy this company at the market cap of just $231 million.   [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](     © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](