Concerned About Inflation? Listen to Bill Dudley Here and then Buy Real Estate.

The Fed was in the news in January with the normally silent NY Fed President, Bill Dudley speaking up. He allowed a 30 minute interview with NBR that is available here and well worth watching. His statements support the current indications from the fed that the discount rate will likely be at or near zero for an extended period, interpreted by many as at least 6 months.

The reality is that no one can guess how long the current hyper-unemployment will keep inflation at bay and allow the fed to hold the near-zero interest rate. It may take all of this year and longer. But do not count on it. If you know of any who have not yet refinanced into fixed rates, tell them they need to talk to us, we can help them find ways to take advantage of this opportunity. The Fed buying of MBS is still set to end March 31 and there will be an unfavorable impact.

Count on rates rising after the Fed stops buying MBS, well before inflation starts pushing rates up. (April Fools will be a new day this year.) Concerned about inflation? You ought to be, but you still have time to prepare now. Buying and holding inflation-riding assets like real estate will be a strategy that combined with today's low, fixed-rates will allow you to look back in a few years and be glad you listened.