“As expected, the Federal Reserve maintained the holding pattern for the federal discount rate that has been in place since the Fed last raised rates in July of 2023,” Green told MPA. “Like a pilot landing a plane in fog, the Federal Reserve is being very patient and deliberate before taking additional action to reduce interest rates. As long as the economy remains relatively strong and inflation continues to moderate, as it has in recent months, the Fed can circle the runway for another meeting cycle or two before trying to navigate the soft landing it has hoped for. But the American consumer, who has been bolstering the economy so far, may very well be running on fumes at this point, and some interest rate relief in the coming months will likely be necessary for the economy to maintain a healthy growth pace.”
Read more: Fed rate decision – what were the key takeaways?
Rich Traub, a commercial real estate partner at Smith, Gambrell & Russell, views the Fed’s stance as double-edged, providing neither significant promise of rate cuts nor immediate stimulation for the real estate market.
“The action by the Federal Reserve is a mixed bag for everyone in the United States,” Traub said. “On one hand, people should be comforted that rates were held steady and there is at least a recognition of potential rate cuts later in the year. But the messaging on rate cuts was less than enthusiastic or promising. If the cuts do occur, they will occur over a longer period of time and are less dramatic than what was hoped for at the end of 2023. All in all, for the real estate market, I don’t think today’s pronouncements move the market one way or the other. I still see the market involved in a waiting game and one that may take longer to play out than what is needed to jumpstart the marketplace.”
The experts agreed that the future of the real estate market remains uncertain, waiting on decisive actions to catalyze movement.
Source: mpamag.com