{"id":1004111110,"date":"2015-01-14T14:25:37","date_gmt":"2015-01-14T22:25:37","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004111110"},"modified":"2022-12-07T21:09:18","modified_gmt":"2022-12-08T05:09:18","slug":"economy-watch-interest-rate-liftoff-sooner-or-later","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/economy-watch-interest-rate-liftoff-sooner-or-later\/","title":{"rendered":"Economy Watch: Interest Rate Liftoff, Sooner or Later?"},"content":{"rendered":"

By Dees Stribling, Contributing Editor<\/em><\/p>\n

Predicting what the Federal Reserve\u2019s going to do about interest rates is something of a mug\u2019s game, since the central bank goes out of its way to be opaque about policy matters. Still, so much rides on the exact number that predicting \u2013 guessing \u2013 when rates will change is a cottage industry among economists, journalists and other interested parties. That includes CRE developers, investors, and lenders, whose deals sometimes depend on interest-rate stability (or simple low rates; it\u2019s easy to love low rates).<\/p>\n

In their various speeches Members of the Federal Open Market Committee offer their views, but never promises, about the future course of monetary policy.\u00a0 On Monday, Atlanta Fed president Dennis Lockhart spoke before the Rotary Club of Atlanta, characterizing the U.S. economy as \u201chitting on all cylinders\u2026 We are getting closer to a point where we can begin a process of normalizing the interest-rate environment. That process will begin with so-called \u2018liftoff\u2019\u2014 that is, the first increase in the policy rate.\u201d The question that naturally follows that kind of statement is, Yes, but when?<\/p>\n

\u201cI think the momentum evident in the second half of 2014 will carry over into 2015, and the ongoing outlook will remain solid,\u201d Lockhart said. \u201cIf that is indeed the case, I believe the first action to raise interest rates will in all likelihood be justified by the middle of the year. The phrase \u2018middle of the year\u2019 is admittedly not very precise. That’s purposeful on my part\u2026\u201d Interestingly, Lockhart\u2019s considered one of the 2015 FOMC\u2019s \u201cdoves\u201d \u2013 that is, willing to wait longer than a \u201chawk\u201d to raise rates (though the terms are subjective, Deutsche Bank ranks FOMC members from 1 to 5 on a dove-hawk scale; Lockhart gets a dovish 1). Another caveat that should be noted: at the beginning of the speech, the head of the Atlanta Fed stressed that he isn\u2019t speaking for the FOMC or even the Atlanta Fed, but for himself. \u201cMy colleagues may not agree with what I have to say,\u201d he noted wryly.<\/p>\n

Indeed, Chicago Fed president Charles Evans, who\u2019s also a member of FOMC and also a dove (1 on the Deutsche Bank scale), said on Friday on CNBC\u2019s \u201cSquawk Box\u201d that he\u2019s OK with waiting until 2016 before the liftoff. Though the job outlook is a lot better now, he fretted about the singular lack of inflation in the economy, which is below the Fed\u2019s target of 2 percent. What would bring the rate upward? Upward wage pressures, Evans said. So far the job recovery\u2019s been good, but not the wage recovery, and he\u2019s willing to wait for that to happen before liftoff. “It’s one of the dilemmas we’re facing,\u201d the Chicago Fed head said. \u201cAnd that’s why I’m in favor of being patient on raising interest rates.\u201d<\/p>\n

So not even the Fed doves agree on when rates will go up. In the meantime, anecdotal evidence in the different commercial property sectors suggest that deal velocity is up as the near year grinds on, to lock in low rates the likes of which might go away sometime this year.<\/p>\n

Wall Street continued on its negative track on Monday. The Dow Jones Industrial Average was down 96.53 points, or 0.54 percent, while the S&P 500 lost 0.81 percent and the Nasdaq declined 0.84 percent. Once again, REITs bucked the tide: The Dow Jones U.S. Select REIT Index gained 0.81 percent on Friday.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Predicting what the Federal Reserve\u2019s going to do about interest rates is something of a mug\u2019s game, since the central bank goes out of its way to be opaque about policy matters. <\/p>\n","protected":false},"author":1023,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21742],"tags":[],"class_list":["post-1004111110","post","type-post","status-publish","format-standard","hentry","category-latest"],"acf":[],"yoast_head":"\nEconomy Watch: Interest Rate Liftoff, Sooner or Later? - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/economy-watch-interest-rate-liftoff-sooner-or-later\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Economy Watch: Interest Rate Liftoff, Sooner or Later?\" \/>\n<meta property=\"og:description\" content=\"Predicting what the Federal Reserve\u2019s going to do about interest rates is something of a mug\u2019s game, since the central bank goes out of its way to be opaque about policy matters.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/economy-watch-interest-rate-liftoff-sooner-or-later\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-01-14T22:25:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T05:09:18+00:00\" \/>\n<meta name=\"author\" content=\"Dees Stribling\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/economy-watch-interest-rate-liftoff-sooner-or-later\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/economy-watch-interest-rate-liftoff-sooner-or-later\\\/\"},\"author\":{\"name\":\"Dees Stribling\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/dc1e9fa4ee0430d86f8e60cd697c953c\"},\"headline\":\"Economy Watch: Interest Rate Liftoff, Sooner or Later?\",\"datePublished\":\"2015-01-14T22:25:37+00:00\",\"dateModified\":\"2022-12-08T05:09:18+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/economy-watch-interest-rate-liftoff-sooner-or-later\\\/\"},\"wordCount\":586,\"commentCount\":0,\"articleSection\":[\"News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/economy-watch-interest-rate-liftoff-sooner-or-later\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/economy-watch-interest-rate-liftoff-sooner-or-later\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/economy-watch-interest-rate-liftoff-sooner-or-later\\\/\",\"name\":\"Economy Watch: Interest Rate Liftoff, Sooner or Later? 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