Impact of the March FED Meeting
WHAT THE RELATIONSHIP BETWEEN THE FED FUNDS RATE AND CRE FINANCING COSTS MEANS FOR INVESTORS THIS YEAR
The Federal Reserve Kept Rates Flat In March
As expected, The Federal Reserve Maintained An Overnight Rate of 5.25%-5.50% in March 2024
Expectation for EOY 2024 show the Fed believes either two or three 25 basis point rate cuts are likely this year
Rate Cuts Will Not Make Lending Cheaper Overnight
While the 10-year treasury moves with the Fed Funds Rate generally over the long term, many other factors influence treasury yields
Heightened treasury issuance could raise 10-year treasury rates, while reducing quantitative easing would have the opposite effect
Investors Should Assess Deals Based on Today
We can predict the Fed Action this year, but it is harder to predict how those actions will impact CRE lending right away
Real estate fundamentals are generally strong, and CRE assets will remain a sound investment in 2024
*February
Sources: Marcus & Millichap Research Services, Federal Reserve
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