By Dees Stribling for BizNow
The Federal Reserve Open Market Committee’s decision Wednesday to hold the base interest rate, and maybe cut it soon, was no doubt welcome news to the commercial real estate industry, but is seen more as a step toward regularity than a huge win.
“People don’t like to use the word ‘transitory,’ but in my opinion, the entire thing was transitory,” Taurus Investment Holdings CEO Peter Merrigan told Bisnow Wednesday afternoon, referring to the spike in inflation and the central bank’s monetary policy reaction.
“We’ll probably go back to some kind of normality in the overall markets, assuming that there’s no further massive geopolitical disruption,” Merrigan said.
Most FOMC members believe the target range for the federal funds rate will be lower next year with only one member saying the rate will be the same, according to the Fed’s summary of economic projections.
Five members of the committee said the appropriate rate next year would be 50 basis points lower than it is now. Six members said the appropriate rate next year would be 75 basis points lower. If lowered 25 basis points at a time, that would mean three cuts in 2024. The base federal funds rate is 5.25% to 5.5%.