{"id":1004128882,"date":"2015-10-07T10:59:33","date_gmt":"2015-10-07T18:59:33","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004128882"},"modified":"2022-12-08T22:27:21","modified_gmt":"2022-12-09T06:27:21","slug":"the-feds-delay-and-cre","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/the-feds-delay-and-cre\/","title":{"rendered":"The Fed\u2019s Delay and CRE"},"content":{"rendered":"

\"Shlomi<\/a>By Shlomi Ronen, Founder & Managing Principal,\u00a0<\/em>Dekel Capital<\/em><\/p>\n

For the past several months, the commercial real estate industry has been awaiting the decision that would impact not only its bottom line but also its momentum toward a stronger recovery. While labor markets have strengthened, downward pricing pressure from the decline in oil and commodities has kept inflation below the Federal Reserve\u2019s target. In fact, the Fed took the path of least resistance in September and voted to keep interest rates at 0.25 percent \u2014 but for how long?<\/p>\n

In speeches following the decision, Federal Reserve Chairwoman Janet Yellen has called for proactive steps in the coming months, while hinting at an increase before year\u2019s end. She warned that continuing to keep rates this low could encourage \u201cinappropriate risk-taking\u201d that could negatively impact the strength of the financial markets.<\/p>\n

An increase requires the economy to be in a position for maximum growth. To provide further insight into why the market is not quite there, Yellen also echoed Stanley Fischer\u2019s thoughts from the Jackson Hole Summit in August. Fischer explained that unemployment is not what\u2019s slowing inflation; the lagging inflation is rather a product of a drop in oil and commodity prices and a rise in the dollar. The strength of the dollar allows for cheaper imports but impedes exports. In its post-September meeting press release, the Fed confirmed that rates will increase \u201cwhen it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term,\u201d according to the issued statement.<\/p>\n

The 16-1 vote against raising rates in September was the first time since January that Fed members were not unanimous in their voting. The decision will be tabled until their next meeting, where projections show 13 policy makers seeing higher rates by year-end. Based on the forecast, we are likely to see only one increase in October or December, down from two in the previous forecast.<\/p>\n

What does this mean for commercial real estate? The Fed\u2019s decision brings stability and continuation of low interest rates for construction, bridge and floating-rate loans for now. Additionally, the pressure on bank earnings\u2019 net interest margin should encourage financiers to increase real estate lending.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Shlomi Ronen, Founder & Managing Principal, Dekel Capital: What does the Fed’s delay on raising interest rates mean for commercial real estate finance?<\/p>\n","protected":false},"author":1250,"featured_media":1004128884,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825],"tags":[],"class_list":["post-1004128882","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"acf":[],"yoast_head":"\nThe Fed\u2019s Delay and CRE - 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\/the-feds-delay-and-cre\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Fed\u2019s Delay and CRE\" \/>\n<meta property=\"og:description\" content=\"By Shlomi Ronen, Founder & Managing Principal, Dekel Capital: What does the Fed's delay on raising interest rates mean for commercial real estate finance?\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/the-feds-delay-and-cre\/\" \/>\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=\"2015-10-07T18:59:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T06:27:21+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2015\/10\/Shlomi-Version2-HighRes-e1461683989547.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"533\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Shlomi Ronen\" \/>\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\\\/the-feds-delay-and-cre\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/the-feds-delay-and-cre\\\/\"},\"author\":{\"name\":\"Shlomi Ronen\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/7d9195aa2144e22ce9792fec5296bd6b\"},\"headline\":\"The Fed\u2019s Delay and CRE\",\"datePublished\":\"2015-10-07T18:59:33+00:00\",\"dateModified\":\"2022-12-09T06:27:21+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/the-feds-delay-and-cre\\\/\"},\"wordCount\":383,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/the-feds-delay-and-cre\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2015\\\/10\\\/Shlomi-Version2-HighRes-e1461683989547.jpg\",\"articleSection\":[\"Finance\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/the-feds-delay-and-cre\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/the-feds-delay-and-cre\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/the-feds-delay-and-cre\\\/\",\"name\":\"The Fed\u2019s Delay and CRE - 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