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."

Recently, investment giant Vanguard dusted off a research paper its Investment Strategy Group published in the summer of 2023 that questioned whether the Fed or anyone else realized a basic economic assumption might have been wrong. Whether they were assuming that the so-called neutral rate of interest, also called R-star or R* — on which many decisions rest — should be significantly higher than regulators and financial powerhouses think.