Implications for commercial real estate as Fed keeps rates steady

With inflation coming down notably since the past summer and with high long-term Treasury rates contributing to tighter financial and credit conditions for households and businesses, the Federal Open Market Committee decided, at its Oct. 31–Nov. 1 meeting, to hold the target federal funds rate steady. This is the second consecutive meeting where no further hikes have been made to the policy rate.

Inflation remains notably above the Fed’s stated 2 percent target, as core inflation rose 0.3 percent in September and had risen 4.1 percent during the preceding 12 months.

Yet the Fed’s analysis of today’s economic environment of higher long-term rates, mortgage rates near 8 percent and tight lending conditions has led it to the decision to keep rates between 5.25 percent and 5.5 percent, as they have been since the July meeting.

During a press conference following his speech announcing the rate decision, Jerome Powell, the Fed’s chairman, alluded to what cou