Location Strategy Chartbook 08.01.2026

The Fed’s decision Wednesday to keep overnight rates unchanged sounds like it would have been clearly bullish, but stocks sold off just after Chair Kevin Warsh’s press conference. (They’ve since rebounded mightily).
 
Also following Warsh’s Q&A, long-term Treasury yields hit a 19-year high. That extended what bond watchers call a “bear steepener.”
 
There are two takeaways when the Treasury yield curve’s slope is positive and increasing, like it is now. Steepening is welcome when it’s a reaction to rising growth expectations. Examples include 2003, 2009 and 2021, times when the economy was recovering from recessions. That pattern this many years into an economic boom is reminiscent of 1966 and (gulp) 1987.
 
Inflation has now been above the Fed’s target for more than five years, and there’s little sign of job-market weakness. That seemed like a time for Warsh to back up his recent tough talk about price stability with action, or at least a call to future action.
 
As the Journal’s Greg Ip wrote, though, the central bank “isn’t a neutral umpire, it is the most important player in the game.” And, when it comes to inflation, an ounce of prevention is worth a pound of cure. Rising yields and uncertainty about central banks’ commitment to stable prices, hallmarks of the 1970s, later required draconian rate hikes to repair.
 
Then there’s a new worry—America’s fiscal health. Debt held by the public is on track to blow past $40 trillion very soon. Buying the longest-term debt requires faith that the pile of IOUs will be honored.
 
Nobody expects the U.S. to actually default, but the release valve for high debt and deficits might be a future inflation surge. The real (inflation-adjusted) yield on the long bond just hit a multidecade high, too.
 

Brandon Roth, IPA as of July 27, 2026 Agency Pricing

The longer commodity prices remain elevated, the greater the inflationary burden on US consumers.

The extent to which AI has impacted job growth remains a subject of debate among economists. A look at the occupational data shows how the composition of job functions has changed across industries. Many of these shifts have been underway for more than a decade, but the pace of change has accelerated since 2022, particularly in routine office support roles, as productivity enhancements, including the use of AI, have become widespread.

Take office and administrative support roles. They account for more than 11% of all jobs, the largest category, according to the most recently released data from May 2025. These roughly 17.7 million clerical and customer-service-oriented roles are also some of the most widely dispersed. No single industry accounts for more than 16% of the total. And among industries, no single sector relies on office and administrative workers for more than 30% of jobs.

These occupations have also seen the most significant decline in raw numbers and as a share of the total workforce since 2019. While the outsourcing and automation of customer service roles has been a long-standing trend, the pace of that decline has accelerated since 2022.

Management occupations, on the other hand, continued to increase their share and now account for more than 7.2% of all occupations. While the pace of that growth slowed between 2022 and 2025, growth in management occupations was noticeable even in slower-growing industries.

Few ideas in finance have been as successful as the 401(k), which has helped some 70 million American workers plan for their later years and sock away $10 trillion in the process. Even so, recent surveys showed Americans are having a harder time saving for retirement because of rising living costs. Housing, car payments, healthcare and other everyday expenses are taking priority over long-term retirement planning. Higher costs are also prompting more Americans to tap into their retirement accounts despite high penalties and taxes for doing so.

As the number of logistics facilities built over the past several years has soared, many tenants have opted to relocate to newly built space rather than renew leases in older buildings. This trend has been especially pronounced among logistics firms occupying more than 100,000 square feet.

Mixed-use areas where people can live, work, shop and socialize are commanding some of commercial real estate's highest rents and occupancy rates, according to a new report.

These lifestyle districts, or walkable neighborhoods, outperform traditional single-use development on nearly every major financial measure because residents, workers and visitors spend more of their time and money there, real estate services firm JLL found in its study. Chicago-based JLL describes that dynamic as a "closed-loop ecosystem."

From New York's Hudson Yards and Chicago's Fulton Market to Georgetown in Washington, D.C., these districts combine housing, offices, retail, restaurants, hotels and entertainment built around how people want to live, work and spend time. JLL estimates almost 1 billion square feet of this real estate exists in the United States, representing roughly 4% to 5% of the nation's total inventory.

How do they outperform standalone assets? Occupancy is higher.
-Multifamily rents: 48% higher than comps
-Hotels: 45% average daily rate premium
-Retail rents: 46% higher
-Office rents: 38% higher

Residents of Fulton Market spent two-thirds of their shopping and leisure time in the neighborhood, while residents of the nearby office-heavy West Loop spent just 18% of that time in their district, according to JLL. In Northern Virginia, an added 21% of workers stayed to shop, dine or relax after work instead of heading straight home.

If you can’t sell your house, what do you do next? Some sellers give up and list the home for rent.

The May Case-Shiller house price index released this week, the seasonally adjusted National Index (SA), was reported as being 79.3% above the bubble peak. However, in real terms, the National index (SA) is about 7.4% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 0.5% below the bubble peak.

People usually graph nominal house prices, but it is also important to look at prices in real terms. As an example, if a house price was $300,000 in January 2010, the inflation adjusted price would be $461,000 today (a 54% increase). That is why the second graph below is important - this shows "real" prices.

Nominal House Prices: The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA in nominal terms as reported. In nominal terms, both the Case-Shiller National index (SA) and the Case-Shiller Composite 20 index (SA) are just below the all-time high.

Real House Prices: The second graph shows the same two indexes in real terms (adjusted for inflation using CPI). In real terms (using CPI), the National index is 4.8% below the recent peak in 2022, and the Composite 20 index is 4.5% below the recent peak in 2022.

Home Price Indices for May ("May" is a 3-month average of March, April and May closing prices). March closing prices include some contracts signed in January, so there is a significant lag to this data. The National index decreased 0.05% month-over-month (MoM) seasonally adjusted. This was the 3rd consecutive month with a MoM decline,