CRE Risks, Rapid Economic Expansion Could Force Fed To Raise Rates Quicker

Fed Chair Janet Yellen signaled two possible interest rate moves for the year following this month's rate hike, but now Fed governors are estimating three move moves at a faster pace than originally projected.

Boston Fed President Eric Rosengren said implementing quicker rate hikes would do two things — one, keep investors from taking excessive risks in commercial real estate, and two, properly reflect the strength of the U.S. economy, the Wall Street Journal reports. San Francisco Fed President John Williams said that while he still expects only two more hikes this year, he would not rule out the possibility of a third.

But not everyone is clamoring for three more moves this year. One of Yellen’s closest allies, Fed Vice Chairman Stanley Fischer, recently said he forecasts only two more hikes for 2017.

The increase in rates to a range of 0.75% to 1% in March was of little surprise to investors, and commercial real estate economists had overwhelmingly predicted it based on the economy’s continued recovery and February’s strong jobs report. It was the second quarter-point increase in benchmark rates implemented since December's move — prior to that the Fed had not moved rates since December 2015.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's National Newsletters
Related Stories

AI Cloud Firm Nebius Raises $5.75B In Debt To Fuel Data Center Expansion

Aberdeen Goes Global With £700M Merged Fund

Sun Communities Taps Equity Residential Veteran As New CFO

Data Center Deals Propel July CRE Sales Volume To Best Performance Since 2005

Dog Haus Pursues Major Expansion After Tapping Former Jersey Mike's Execs

'Aggressive' Antitrust Settlement Unwinds $100M Zillow, Redfin Deal

Trump's New Canadian Tariffs To Spike Additional Materials Costs

Wells Fargo Moves To Foreclose On $1.3B Workspace Property Trust Portfolio

Turner Construction Hit With Cyberattack, Hackers Claim Leaks Of Military Info, NDAs

Latest Round Of Fannie Mae Senior Staff Layoffs Has Multifamily Sector Anxious

Why Hines Is Restarting Its Development Engine

How Integrated Infrastructure Can Help AI Data Centers Deploy Faster, Build Smarter