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Investment Fund Manager: Here's Why the Rate Hike Doesn't Matter


Unlike many in the industry, Ethan Penner, founder of real estate investment firm Mosaic, isn’t scared of the looming Fed rate hike

Ethan tells Bloomberg that the rate increase is a “non-event,” and that it “shouldn’t change anything materially."

The real thing to watch, he says, is if a strong economy pushes rates higher still, to the point where they could actually affect stocks, bonds and real estate. But 25 bps simply won’t do that.

However, Ethan warns against "jumping into bed" with speculative developers in gateway cities, where foreign cash flow might not keep up with the supply of pricey properties.

As far as what China’s slowdown will do to that foreign cash, Ethan says it could go either way. Chinese investors might rush for safer US markets, but China’s government could put more restrictions on cash outflow, limiting their buying power. [Bloomberg]