Fed Rate Cut Could Bolster Real Estate Market

WASHINGTON, DC-The Federal Reserve’s decision Wednesday to lower interest rates by a half of a percentage point triggered a stock market rally and drew applause from an expert in commercial real estate. Some commercial markets have been feeling a pinch caused by layoffs due to the economy’s downturn.

The Fed lowered the interest rate financial institutions charge each other on overnight loans to 4.5% from 5% and lowered by a half-percentage point to 4% the discount rates financial institutions pay when they borrow from a federal reserve bank.

“It’s very good news,” says Bill Shanahan, executive director at Cushman & Wakefield Inc. Financial Services. “From a general perspective, it puts more money in the economy. They are loosening up the money supply, which is what people look at.”