{"id":1004694100,"date":"2023-12-13T13:19:44","date_gmt":"2023-12-13T21:19:44","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004694100"},"modified":"2023-12-14T15:08:43","modified_gmt":"2023-12-14T23:08:43","slug":"the-fed-holds-the-line-on-interest-rates-again-whats-next","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/","title":{"rendered":"The Fed Holds the Line on Interest Rates Again. What’s Next?"},"content":{"rendered":"
\"\"

Federal Reserve Chair Jerome Powell at Wednesday’s press conference. Screenshot by Gabriel Frank<\/p><\/div>\n

In its final meeting of the year, the U.S. Federal Reserve Open Markets Committee<\/strong> elected on Wednesday to again hold interest rates at their current level<\/a>, a range of 5.25 to 5.5 percent. Additionally, the Fed predicted that it would cut rates three times through 2024, potentially bringing the target range down to 4.25 to 4.5 percent before the end of the year. The prediction drastically shifts policy from a year where the federal funds rate was raised four times by 75 basis points.<\/p>\n

The announcement follows recent inflation and jobs reports that point to a stable, yet slightly weakening economy. Through November, the Consumer Price Index moderated to 3.1 percent, down 10 basis points from October, while employment rose by nearly 200,000. In a press briefing following the announcement, Fed Chair Jerome Powell cited these indicators, signaling that the fight against inflation has entered a new stage.<\/p>\n

Powell acknowledged the indicators, saying that the Fed\u2019s tightening may be \u201cat or near its peak,\u201d but stressed that the battle is far from over. \u201cInflation is still too high, ongoing progress in bringing it down is not assured, and the path to getting there is uncertain,\u201d he said. Currently, the Fed anticipates reaching 2 percent inflation in 2026.<\/p>\n

What does the CRE industry think?<\/h2>\n

Coupled with the recent economic indicators, that trend could promote the market stability that investors and lenders are seeking. Keyvan Ghaytanchi, chief investment officer at BEB Capital<\/strong>\u00a0foresees a \u201csignificant uptick\u201d in transaction volumes going into the new year. “This shift is expected to invigorate market activities, as investors and stakeholders have been eagerly awaiting a more predictable rate environment to engage in more robust transacting,\u201d Ghaytanchi told Commercial Property Executive<\/em>.<\/p>\n

The Fed\u2019s messaging further added to the optimism, particularly for investors focused on high-performing asset classes. For Harry Klaff, principal & U.S. president of Avison Young,<\/strong> the Fed\u2019s signals are \u201cencouraging news for commercial real estate investors, particularly for those carefully watching the expected activity of industrial, multifamily, and community-based retail sectors,\u201d anticipating no further tightening through the first half of 2024. \u201cIt creates more certainty and stability to foster the belief that we may be at the peak for interest rates\u2014 encouraging investors to start buying again,\u201d Klaff said in a statement.<\/p>\n

\n

READ ALSO: <\/strong>In a Low-Deal Year, These Transactions Stand Out<\/span><\/a><\/p>\n

\n

Rajeev Hota, director of commercial lending at Acuity Knowledge Partners, <\/strong>anticipates that rate cuts will contribute to enthusiasm among borrowers, as well as to a newfound willingness for lenders. \u201cWhen interest rates are lowered, bond prices will increase, banks will provide lower interest rates on savings and cash deposits, and mortgage rates fall,\u201d Hota told CPE<\/em>. Consequently, \u201cIt allows borrowers to borrow money, which in turn paves ways for lenders to (make) more loans.\u201d<\/p>\n

Others expect low transaction volumes to persist into 2024, especially given the approaching wave of CMBS loan maturities. \u201cWe are predicting similar themes in 2024 for the commercial real estate industry that we saw in 2023: low transaction volumes, wide bid\/offer spreads, and reduced property values.\u201d noted Carey Heyman, Managing Principal of the Real Estate Industry at CliftonLarsonAllen<\/strong>.<\/p>\n

When will the rate cuts begin?<\/h2>\n

Regardless of when the anticipated cuts take place, Chad Lavender, Newmark<\/strong>‘s president of capital markets for North America, predicts that the Fed will be \u201cslow and deliberate in cutting rates,\u201d especially with inflation at more than a percentage point above the Fed\u2019s target. Still, Lavender does not believe that the caution will interfere with transaction volumes. \u201cStabilization is key and we believe we are there. We are already seeing an increase in transactions and expect it to continue,\u201d he told CPE<\/em>.<\/p>\n

Others have more concrete predictions, focused mainly on the third and fourth quarters of next year. \u201cLooking ahead to 2024, the Federal Reserve forecast suggests that interest rates will be cut sometime in the latter second half of the year, with current models suggesting the fourth quarter,\u201d Heyman predicted. In fact, the decision to cut rates may not be entirely in the Fed’s control, given the roughly $659 billion in commercial loans that CREDiq expects to mature<\/a> in 2024. \u201cGiven (that) the market is going to encounter a larger volume of CMBS loans maturing in the next 6 months, the refinance bottlenecks need to be eased out by regulators,\u201d Hota noted.<\/p>\n

Additionally, the Fed needs to balance its mission to reduce inflation with its strong efforts to avoid any further economic decline. \u201cthe weakening growth outlook can put pressure on the Fed to take a call on reducing interest rates to avoid further deterioration,\u201d Hota concluded.<\/p>\n","protected":false},"excerpt":{"rendered":"

Rate cuts could finally be on the horizon, but the battle against inflation isn’t over yet.<\/p>\n","protected":false},"author":3012,"featured_media":1004694101,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21825,21783,23891,21742,51037],"tags":[52268,52225,36252,52054,50999],"class_list":["post-1004694100","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-finance","category-investment","category-national","category-latest","category-trends","tag-acuity-knowledge-partners","tag-beb-capital","tag-cliftonlarsonallen","tag-federal-reserve-open-markets-committee","tag-newmark"],"acf":[],"yoast_head":"\nThe Fed Holds the Line on Interest Rates Again. What's Next? - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"In its final meeting of the year, the U.S. Federal Reserve Open Markets Committee held interest rates at their current level.\" \/>\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-fed-holds-the-line-on-interest-rates-again-whats-next\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Fed Holds the Line on Interest Rates Again. What's Next?\" \/>\n<meta property=\"og:description\" content=\"In its final meeting of the year, the U.S. Federal Reserve Open Markets Committee held interest rates at their current level.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/\" \/>\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=\"2023-12-13T21:19:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-12-14T23:08:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/2023-12-13_14-40-38-e1702497793549.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1201\" \/>\n\t<meta property=\"og:image:height\" content=\"899\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Gabriel Frank\" \/>\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\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/\",\"name\":\"The Fed Holds the Line on Interest Rates Again. What's Next? - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/2023-12-13_14-40-38-e1702497793549.png\",\"datePublished\":\"2023-12-13T21:19:44+00:00\",\"dateModified\":\"2023-12-14T23:08:43+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c\"},\"description\":\"In its final meeting of the year, the U.S. Federal Reserve Open Markets Committee held interest rates at their current level.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/2023-12-13_14-40-38-e1702497793549.png\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/2023-12-13_14-40-38-e1702497793549.png\",\"width\":1201,\"height\":899},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Fed Holds the Line on Interest Rates Again. What’s Next?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c\",\"name\":\"Gabriel Frank\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/GF2.jpg?w=90\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/GF2.jpg?w=90\",\"caption\":\"Gabriel Frank\"},\"description\":\"Gabriel Frank is a Senior Associate Editor with Multi-Housing News and Commercial Property Executive. He has a background in journalism, and is the editor of MHN's Daily and Weekly newsletters. He lives in New York City.\",\"birthDate\":\"2000-05-11\",\"gender\":\"Male\",\"jobTitle\":\"Editor\",\"worksFor\":\"Yardi Systems\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/gabriel-frank\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"The Fed Holds the Line on Interest Rates Again. What's Next? - Commercial Property Executive","description":"In its final meeting of the year, the U.S. Federal Reserve Open Markets Committee held interest rates at their current level.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/","og_locale":"en_US","og_type":"article","og_title":"The Fed Holds the Line on Interest Rates Again. What's Next?","og_description":"In its final meeting of the year, the U.S. Federal Reserve Open Markets Committee held interest rates at their current level.","og_url":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2023-12-13T21:19:44+00:00","article_modified_time":"2023-12-14T23:08:43+00:00","og_image":[{"width":1201,"height":899,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/2023-12-13_14-40-38-e1702497793549.png","type":"image\/png"}],"author":"Gabriel Frank","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/","url":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/","name":"The Fed Holds the Line on Interest Rates Again. What's Next? - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/2023-12-13_14-40-38-e1702497793549.png","datePublished":"2023-12-13T21:19:44+00:00","dateModified":"2023-12-14T23:08:43+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c"},"description":"In its final meeting of the year, the U.S. Federal Reserve Open Markets Committee held interest rates at their current level.","breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/2023-12-13_14-40-38-e1702497793549.png","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/2023-12-13_14-40-38-e1702497793549.png","width":1201,"height":899},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/the-fed-holds-the-line-on-interest-rates-again-whats-next\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"The Fed Holds the Line on Interest Rates Again. What’s Next?"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c","name":"Gabriel Frank","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/GF2.jpg?w=90","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/05\/GF2.jpg?w=90","caption":"Gabriel Frank"},"description":"Gabriel Frank is a Senior Associate Editor with Multi-Housing News and Commercial Property Executive. He has a background in journalism, and is the editor of MHN's Daily and Weekly newsletters. He lives in New York City.","birthDate":"2000-05-11","gender":"Male","jobTitle":"Editor","worksFor":"Yardi Systems","url":"https:\/\/www.commercialsearch.com\/news\/author\/gabriel-frank\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/12\/2023-12-13_14-40-38-e1702497793549.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004694100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/3012"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004694100"}],"version-history":[{"count":9,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004694100\/revisions"}],"predecessor-version":[{"id":1004694268,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004694100\/revisions\/1004694268"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004694101"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004694100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004694100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004694100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}