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Interest Rates May Not Be High Enough: Vanguard

The so-called neutral rate of interest may have grown enough to need much higher interest rates then policymakers’ assumptions.

The world of CRE finance has been caught up with discussions of when rate cuts should or will begin. In January, markets were excited by the prospect of an early cut. By early April, investors wondered if there would be the full three cuts they thought had been promised.

A couple of weeks later, the Federal Reserve leaned into backpedaling. Chair Jerome Powell said that “recent data have clearly not given us greater confidence and instead indicate that it is likely to take longer than expected to achieve that confidence.”

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Erik Sherman

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