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NTEREST GENERATOR - WHAT A HAWKISH FED MEANS FOR CRE INVESTOR

Updated: Apr 14

Highlights from Fed Meeting and Implications of a Hawkish Fed



What can members do?

  • Minutes from the latest Fed meeting were just released – Sentiment was hawkish

  • Fed reiterating possibility of 50 bps rate hike(s) at future meetings

  • Also began laying the groundwork for Quantitative Tightening (QT)

  • Timing unclear – “…commencement of balance sheet runoff at a coming meeting…”

  • Fed will let up to $95B per month expire; Previously was buying $125B per month


  • QT puts upward pressure on long-term rates (10-Year), reducing yield curve inversion risk

  • Overall, the state of the economy remains sound – Job growth, consumption, wage growth all very positive

  • Sustained elevated inflation and rising interest rates are bigger risks for CRE investors

  • Real estate is a great investment vehicle during times of inflation


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