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Fed Holds Interest Rates in Warsh’s Second Meeting as FOMC Chair
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Commercial Observer
The second Federal Open Market Committee (FOMC) meeting under new Federal Reserve Chair Kevin Warsh signaled another reality check of higher-for-longer interest rates to the commercial real estate industry.
Elwell added that continued stabilization of interest rates and cap rates will lead to increased investments in the U.S. CRE space this year.
The Fed previously hiked interest rates in 11 out of 12 FOMC meetings between March 2022 and July 2023 to between 5.25 and 5.5 percent followed by a 14-month pause.
While the FOMC has cut rates a combined six times in 2024 and 2025, interest rates remain far higher than the near-zero borrowing levels that existed during the COVID-19 pandemic.
Perera said transaction activity should pick up in the lodging sector as hotel cap rates adjust to higher-for-longer interest rate conditions.