Your Weekend Reading: The Rate-Hike Peak Comes Into View

The dents in global economic growth are growing more visible and fallout from financial-market tension is lingering—potentially indicating that most central banks are close to a peak in hiking interest rates. While the US is making some progress in its inflation fight, the Federal Reserve is still expected to hike rates again next month, potentially followed by a pause. The possible price of progress? Fed staff economists now forecast a “mild recession” later this year. The European Central Bank and its regional counterparts might keep going with rate hikes a bit longer, but from Brazil to Indonesia, central banks could pivot toward rate cuts. A new wrinkle is the Saudi-Russia oil alliance: The OPEC+ decision to cut output for the second time since President Joe Biden sought an increase will widen supply shortfall later this year. For consumers, gas and oil prices could rise, possibly pushing inflation back up while funneling more money to Vladimir Putin and his war.

What to do with those half empty, aging US skyscrapers? Tear ‘em down—that’s the advice of Kyle Bass, founder of Hayman Capital Management. He predicts more pain for the commercial real estate sector, thanks to employees working from home and the impracticality of converting most office towers to housing. Meanwhile, almost $1.5 trillion of US commercial real estate debt comes due for repayment before the end of 2025, begging the question: who will help refinance it? Shadow lenders are circling as traditional banks and the bond market back away. This could get expensive.