Last week was truly one for the record books. Behind all the anticipation around Elon’s Twitter buyout, the cease saga of CNN+, and Johnny Depp’s court case drama, there were big concerns brewing in the all-American business sector.

To cap it off, Wall Street ended the week in an uproar, with the Dow falling 980 points—its worst day since before Biden was elected. This came after comments by Federal Reserve Chairman Jerome Powell on the subject of interest rate increases.

And if that weren’t enough to send the markets into meltdown mode, Verizon (VZ), one of the Dow’s most prized components, reported a dire earnings outlook after a decline in subscription revenue through the first quarter of 2022.

Of course, our other indexes weren’t exactly immune to this ebb in the market. Both the S&P and Nasdaq fell over 2.5%.

So, what does all this mean to the well-being of our already ornery economy? Well, Powell has just confirmed what many investors already suspected—that a half-point interest rate hike is “on the table” for the Fed’s meeting in May. This in and of itself doesn’t seem like such a big deal, but our investor class doesn’t believe it will end there. Some actually suspect more aggressive hikes are in the cards.

And while the Fed seems to be implementing these rate increases to quell runaway inflation, Wall Street suspects it will only slow the housing market, decrease consumer spending, and possibly spell a recession.

From CNN:

"'Markets are very uneasy about the growing likelihood of a policy error by the Federal Reserve,' said Jamie Cox, managing partner for Harris Financial Group, in an email. 'It’s madness really. Most investors would be well served to ignore the machinations of the pricing craziness and wait to see what actually happens with rates.

"The CNN Business Fear & Greed Index, which measures seven indicators of market sentiment, fell into Fear mode Friday.

“'Fed worries and disappointing earnings are a lethal combination given how tenuous market sentiment is at the moment,' said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management."

As of now, it’s hard to tell exactly what could arise from the Fed meeting in May. Is Wall Street really that scared of the interest rate increase or are they just in panic mode thanks to PTSD from the pandemic?

My advice: Don’t do anything rash. Let’s put Friday in the rearview and focus on making investment decisions based on sound economics rather than letting fear run our collective financial thinking.

Other Non-REIT News to Know About - Starbucks Workers Unite to Wreck Share Prices

Starbucks (SBUX) shares are on the ropes as the java giant can’t seem to come to terms with its growing union.

Of course, all the infighting has left Wall Street wary of the world leader in coffee culture. Since April, shares have slid 12%, dragging the company’s market value down to $92.2 billion. The S&P 500 fell just 2% in the same time period. Wedbush Securities and Citi Research both downgraded shares to neutral ratings this month, calling out the union dispute and other concerns.

Last summer, company-owned Starbucks cafés in Buffalo, New York, petitioned the National Labor Relations Board for a union election. Since that time, over 200 of the coffee chain’s locations have filed the paperwork to unionize.

Though Starbucks hangs its hat on a reputation of progressive thinking, I can’t imagine the top brass of the barista realm truly welcoming the likes of the modern labor movement. We shall wait and see what happens.

The World According to REITs - REITs as an Insulation Against Inflation

I have been saying this for years, but as the subject arises more and more, many have caught onto the pros of keeping a REIT-heavy portfolio to stave off the effects of inflation. Recently, Jonathan Morris, REIT Academy managing director, joined Yahoo! Finance Live to discuss the outlook on REITS, inflationary environments, and the rise of housing prices.

Morris cited the over $1.2 trillion growth in the last 25 years, plus the benefits to individual investors and ease at which REITs allow them to participate in the real estate market, one of our most inflation-proof economic sectors. He said:

"Real estate is and has always been considered an inflation hedge. So what that means is if you own commercial real estate or even residential real estate, you’ve seen the values of that real estate go up pretty significantly. That is a hedge against inflation—meaning other aspects of the economy are going up, but so is real estate.

"So it offsets at least one to one or even more what other pricing is doing. So it has been a port in the storm, if you will, for a lot of investors. When inflation comes around and they own real estate, they feel somewhat protected by rising prices due to the fact that their investments are rising as well."

As we move further into the uncertainties of an inflation-prone economy, it’s more important than ever to consider REITs as an investment staple. With the rise of housing prices and a proliferation of multifamily developments, there has never been a better time to enter this market.