Will The Used Rolex Price Bottom Hold With Fed Pivot 'Likely' Delayed?

We first put the secondary market for Rolex and Patek Philippe timepieces on bottom watch (read: here) in December 2023, after the Federal Reserve announced the interest rate hiking cycle was nearing an end. In mid-March, we asked the question: Did The Used Rolex Watch Market Finally Bottom?

After five months of stabilization, the Bloomberg Subdial Watch Index, which tracks prices for the 50 most-traded watches by value on the secondary market, continues to find a temporary floor between $33,800 and $33,500. The index fell .1% to $33,558 in March. It slid 8.7% in a year and plunged 42% in two years. 

Per Bloomberg:

Among a handful of outperformers in March, the Rolex GMT Master II with a ceramic blue and red bezel gained 3.2% to trade at $20,935, according to the index. Nicknamed the "Pepsi," the watch has been among the top performers in the past year amid speculation it might be discontinued, although it remains in the collection.

The Rolex Submariner with a green bezel, black dial and date complication nicknamed the "Starbucks," gained about 1% in March to trade at $15,259, the data shows.

Meanwhile, the Patek Philippe Nautilus 5711 with a blue dial, a steel sports model with an integrated bracelet that was one of the so-called 'hype' watches during the peak of the market, gained about 1.1% last month to trade at about $98,753.

Demand for luxury has cooled over the last two years. Luxury has plunged into turmoil because of soaring borrowing rates, which are hammering demand for watches, purses, and jewelry.

Today's news of hotter consumer prices in the US could complicate matters for the Fed and possibly postpone the first interest rate cut to the second half of the year. 

Implied interest rate swaps show less than two cuts are being priced in for the year, down from 7 in early January. 

With interest rate cuts likely being delayed this summer to fall, if not after, higher for longer could delay recovery in used luxury watch prices and or send prices even lower.