Global central banks are largely holding rates steady amid heightened uncertainty around growth and inflation, creating a more complex outlook for commercial real estate, according to Ryan Severino, chief economist at BGO, in his quarterly update. While the U.S. Federal Reserve, Bank of Canada, Bank of England and European Central Bank have paused or slowed rate cuts, policy paths remain data dependent, with inflation and economic growth continuing to drive decision making. Long-term government bond yields have generally stabilized within narrow ranges, though volatility has increased in some regions, while Japan remains an outlier with the potential for further tightening.
In this environment, Severino said the implications for commercial real estate are becoming increasingly differentiated across markets, with cap rates and pricing expected to adjust gradually
