February FED Meeting CRE Implications
How Will The CRE Market React To The February Rate Hike?
Fed Slows Rate Increases
On February 1st, the Federal Reserve announced a rate increase of just 25 bps, the smallest increase since March last year
Chairmen Powell declared we are seeing disinflation, supported by several consecutive months of easing CPI, PCE, and PPI inflation measures
How Does This Impact Forward Looking Expectations
While the Fed was eager to project continued increases in 2022, Chairmen Powell is once again suggesting a slower moving approach
A 25-bps lift in March remains likely, but Chairmen Powell’s posturing has shifted
How will this Impact CRE Investors
With rate hikes slowing and recession expectations easing, the probability of a soft landing is gaining momentum
Lending rates have begun to ease, potentially reducing some of the upward pressure on cap rates
*10-Year Treasury through February 1, 2023
Assumes three 25 bps hikes at subsequent FOMC meetings.
Sources: Marcus & Millichap Research Services, Federal Reserve
