The Fed decided to maintain the current level of interest rates at 0.25 to 0.50 percent, following the two-day discussion of economic outlook both globally and in the United States. The Fed also reiterated that the federal funds rate should increase “gradually,” proving those in the commercial real estate industry who expected four interest rate hikes this year wrong.
According to Fed Chair Janet Yellen, “The median projection for the federal funds rate rises only gradually, to 9/10th of a percent late this year, and 1.9 percent next year. As the factors restraining economic growth are projected to fade further over time, the median rate rises to 3.0 percent by the end of 2018, close to its longer run normal level. Compared with projections made in December, the median path is about one-half percentage point lower this year and next. The median longer run normal federal funds rate has been revised down as well.” Continue reading Fed Rate Decision Welcome News for CRE Borrowers.
Written by Diana Bell.