On 22 March, the Federal Open Market Committee increased the target federal funds rate by 25 basis points to a range of 4.75 percent to 5.0 percent, as part of its efforts to curb inflation, which remains above the long-term target.

“The Fed continuing to raise interest rates means that borrowing costs for commercial real estate will continue to increase, negatively impacting real estate values, transaction volume and the availability of capital available for commercial real estate,” says George Vail, principal of Avison Young’s capital markets group. “Until the Fed ceases interest-rate hikes, we will continue to witness market turmoil and volatility, especially with the US$1.5 trillion of commercial real estate loans coming due in the next three years.”

The Fed’s rate increase comes amid a mixed economic picture. As of the time of this writing on 23 March, the latest US Consumer Price Index report shows prices have increased 6.0 percent in the past 12 mont