Fed Raises Interest Rates

The Federal Reserve raised benchmark rates a quarter-point Wednesday to a range of 0.75% to 1%, signaling two more possible moves this year. The rate hike was of little surprise to investors, and commercial real estate economists overwhelmingly predicted the move based on the economy’s continued recovery and February’s strong jobs report.

Fed chair Janet Yellen had been hinting at a coming rate hike for some time now. During her testimony on Capitol Hill in February, she painted an optimistic picture of the economy, saying she and her colleagues “expect the economy to continue to expand at a moderate pace, with the job market strengthening somewhat further and inflation gradually rising to 2%.”

U.S. employers added 235,000 jobs in February, a sizable increase, and unemployment dropped one-tenth of a percent to 4.7%. Those stats, in addition to inflation's continued rise toward central bankers' 2% goal, triggered the move.

"The latest employment report for February was probably the clincher,” Cushman & Wakefield principal economist Ken McCarthy told Bisnow. “Healthy job growth and rising wages indicate that the economy can withstand higher interest rates."

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