Fed stirs hope of less carnage in commercial real estate next year

by | Dec 18, 2023 | Stock Market

Hopes for a Federal Reserve pivot to rate cuts have given the battered U.S. commercial real-estate market a shot in the arm ahead of a wave of debt coming due next year. Long-term rates, evidenced by a sharp easing of the 10-year Treasury yield since October, were on a path lower before the Fed last week signaled a pivot to rate cuts in 2024.

At the central bank’s final policy meeting of the year, Fed Chairman Jerome Powell said the central bank didn’t want to make the mistake of keeping rates high for too long, a surprise that helped fuel a powerful rally in stocks, bonds and other risk assets. “People are just in a better mood about everything,” said Daniel Lisser, vice president at Marcus & Millichap Capital Corporation, in a phone call Monday with MarketWatch. “The tone has gotten much better with the roughly 100-basis-point drop in the 10-year Treasury yield,” Lisser said, while noting that recent multifamily loans have been getting done at rates in the 6.5% range, down from around 7% in recent months. “For the first time in a year or so, the expectation seems to be more of a downward move in …

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[mwai_chat context=”Let’s have a discussion about this article:nnHopes for a Federal Reserve pivot to rate cuts have given the battered U.S. commercial real-estate market a shot in the arm ahead of a wave of debt coming due next year. Long-term rates, evidenced by a sharp easing of the 10-year Treasury yield since October, were on a path lower before the Fed last week signaled a pivot to rate cuts in 2024.

At the central bank’s final policy meeting of the year, Fed Chairman Jerome Powell said the central bank didn’t want to make the mistake of keeping rates high for too long, a surprise that helped fuel a powerful rally in stocks, bonds and other risk assets. “People are just in a better mood about everything,” said Daniel Lisser, vice president at Marcus & Millichap Capital Corporation, in a phone call Monday with MarketWatch. “The tone has gotten much better with the roughly 100-basis-point drop in the 10-year Treasury yield,” Lisser said, while noting that recent multifamily loans have been getting done at rates in the 6.5% range, down from around 7% in recent months. “For the first time in a year or so, the expectation seems to be more of a downward move in …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]

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