Such a scenario would offer some reprieve to the beleaguered CRE market, he noted: “Lower rates in 2024 would relieve some pressure in CRE credit markets, making it easier to finance commercial property purchases,” Synder said.
CBRE analysts forecast that elusive 2% inflation rate is close at hand: “CBRE expects inflation will decline toward the Fed’s 2% target next year,” analysts wrote in a report after the Fed’s meeting. “We expect that the Fed will gradually reduce rates to ensure that inflation remains in check. For the year, we forecast that the Fed will reduce rates by 100bps to a range of 4.25% to 4.50%.”
That doesn’t mean an immediate jumpstart in the capital markets, however. “We expect capital markets activity will not pick up until mid-2024,” CBRE analysts wrote. “However, recent declines in the 10-year Treasury yield could lead to greater-than-expected investment activity. Leasing activity should remain relatively resilient, although economic uncertainty will be a headwind.”
Melissa Cohn, regional vice president of William Raveis Mortgage, also envisions a future rate cut following the Fed meeting this week. “There are signs that the cumulative rate hikes are doing their job and working to bring the rate of inflation down to its goal rate,” she said. “High interest rates are impacting the economy and hopefully will bring inflation back to 2% next year. The next move by the Fed will be a rate cut at some point in 2024.”
Also responding giddily to the news – albeit in a wordless manner – was Wall Street. The Dow Jones Industrial average rallied more than 500 points after the Fed’s meeting, breaching above the 37,000 mark for the first time. The Dow closed at 37,090.24, exceeding a previous record set in January 2022.
