The CRE industry has been in the doldrums for the last two years due to historic interest rate increases courtesy of the Federal Reserve. The Federal Reserve raised the federal funds rate beginning in March of 2022 from 0.0% to 5.25%, where it stands today. All the pundits who predicted over the last two years that the CRE market would crash, and many community and regional banks would go under from the weight of defaulted CRE loans, have again been proven wrong. I have been steadfast in my writings and analysis that defaulted CRE loans would only be

about 2% of total loans of $4.6 trillion or $92 billion and this would not crash the CRE market or banking industry.

Many market watchers are now opining that the Fed will only lower rates two or three times in the later part of 2024 and the same in 2025. I also don't agree with this prediction and see the Fed lowering rates beginning in the second quarter of this year with the federal funds rate at 4%-4.25% by the end of this year and at 3.0%-3.5% by the end of 2025.