How will the 75 basis-point increase affect finance and investment? Industry veterans weigh in.
As the commercial real estate industry assesses the impact of today’s 75 basis-point interest-rate increase by the Federal Reserve, experts are offering varied predictions on how the series of hikes will affect investment and the capital markets.
Wednesday’s hike, the second 75 basis-point increase in two months, pushes the fed funds rate to a range of 2.25 percent to 2.5 percent. That range was last seen in late 2018, well before the COVID-19 pandemic hit in early 2020 and began what economist Hugh Kelly refers to as a series of earthquakes and aftershocks to the economy that is now teetering on the brink of recession...
Wednesday’s hike, the second 75 basis-point increase in two months, pushes the fed funds rate to a range of 2.25 percent to 2.5 percent. That range was last seen in late 2018, well before the COVID-19 pandemic hit in early 2020 and began what economist Hugh Kelly refers to as a series of earthquakes and aftershocks to the economy that is now teetering on the brink of recession...
RSK: I am no economist nor do I have a real estate degree...but I did take several courses in both disciplines at UW-Madison. I can say this....CRE has a built in factor to help curb inflation and interest rate hikes. When the price of something is too high to establish a good return on investment, prices fall. Everyone needs a place to live but not everyone needs commercial real estate...especially in today`s climate. Prices will slowly fall until it meets a demand level that makes sense.
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- - Volume: 10 - WEEK: 32 Date: 8/2/2022 9:44:44 AM -