Reduce the Fed's Interest Rate !!! - The Fed lowers interest rates and points out caution…
Reduce the Fed's Interest Rate !!! - The Fed lowers interest rates and points caution to real estate investors
The decision has less impact on the longer-term rates that commercial real estate investors usually use
18 In September, 2019 04: 03
By Mary Didoch
Federal Reserve Chairman Jerome Powell (Credit: Getty Images)
The Federal Reserve's decision Wednesday to reduce its benchmark interest rate again, this time by 25 basis points, sends a message to commercial real estate investors that the bank is cautious, one industry professional said.
"The Fed is clear there are some concerns they are responding to," said Sam Chandan, associate dean at the Shack Institute at New York University.
The Fed reduced the interest rate to a range between 1.75 and 2.00 percent, a very expected move. The Federal Open Market Committee said in a statement announcing its decision this afternoon.
For real estate investors, rate cuts can usually be cheaper to borrow.
But Wednesday's adjustment - aimed at short-term rates - has less impact on the longer-term interest rates that commercial real estate investors use more often, Chandan added.
The Fed's decision is an attempt to lower interest rates for the longer term, said Jim Costello. But the cut - smaller than some may have liked - will likely not affect cap rates that have remained flat for the year, he added. "I don't think the throne rates are going to move at all from today," he said. "Today's announcement is just a small move."
On the residential side, lower rates may facilitate home refinancing, but it may not translate into more home sales, said real estate agent Jason Haber of Manhattan Warburg Realty.
"Lower rates are better, but lower prices are better," he said. "Most markets are still overpriced and this has led to inventory problems across the country."
About an hour after 14:00 p.m. The decision, the S&P 500 dipped 15 points and the Dow Jones plunged 99 points. And of the 28 real-estate stocks identified by the Real Deal, 22 have already seen falling prices at that point.
The real estate industry has long supported an economic slowdown. Investors grappled with the price impact of the intended tariffs between the US and China. Job growth has slowed and yields on short-term bonds are now higher than long-term bonds - a consistent predictor of recession.
Investment and business exports have also slowed down and inflation is still two percent lower, a target the Fed is working to raise.
In August, short- and medium-term inflation expectations fell, with consumers being less optimistic about changes in house prices, rent and health care, according to data released this month by the Federal Reserve Bank of New York.
In July, the Fed reduced its interest rate by 25 basis points, a change in bank policy to raise interest rates since 2015. During the financial crisis, the Fed reduced interest rates to almost zero in order to boost economic activity.
However, Wednesday's decision was not unanimous.
In the vote, two Fed Reserve board members wanted to keep the target range the same, and one wanted to lower it to between 1.50 and 1.75 percent. The Fed, which has faced increasing pressure from President Donald Trump to set rates at zero and negative, would not say whether it might cut the federal funds rate again before the end of the year
The Fed lowers interest rates and points caution to real estate investors
The Federal Reserve's decision Wednesday to cut again
Index interest, this time at 25 basis points, sends a
Notice to commercial real estate investors that this is a bank
Carefully move forward, said one professional in the industry. “The Fed clearly
There are some concerns they are responding to, "Sam said
Chandan, associate dean of New York University sack
Institute. The Fed reduced the interest rate for the range between 1.75 and 2.00
Percentage, expected move. God […]
Fed cuts rates, signaling caution ahead for real estate investors
The Federal Reserve's decision on Wednesday to cut again
benchmark interest rate, this time by 25 basis points, sends a
message to commercial real estate investors that the bank is
proceeding cautiously, one industry pro said. “The Fed clearly
has some concerns that they're responding to, ”Sam said
Chandan, associate dean at New York University's Chess
Institute. The Fed cut rates to a range between 1.75 and 2.00
percent, a widely anticipated move. The […] ——————————————————————
Thu, 19 Sep 2019 10: 14: 40 + 0000
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