Cushman & Wakefield's Ken McCarthy

NEW YORK CITY—A modest increase in the short-term federal fundsrate was generally expected as an outcome of the Federal Reserve'sDecember meeting that concluded on Wednesday, and so it came topass. Arguably more telling were signals in the Federal Open MarketCommittee's statement that Wednesday's quarter-point increase couldbe followed by multiple increases next year. Not so long ago, therewere at most two rate hikes on the Fed's long-time horizon through2018.

“What the Fed actually ends up doing will very much depend onthe state of the economy at the time they meet,” Cushman &Wakefield's Ken McCarthy tells “A year ago, thegeneral expectation was that by the end of this year, the federalfunds rate would be somewhere between 1.25% and 1.5%.” In fact,Wednesday's move by the Fed will bring the rate into a rangebetween 0.50% and 0.75%. “Obviously, we didn't get there.”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.


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