Interest rates continue to rise, but may be close to peaking
- March 1, 2023: Vol. 35, Number 3

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Interest rates continue to rise, but may be close to peaking

by Jennifer Molloy

During the past year, markets — and investors — have been reeling from a dizzying number of interest-rate hikes by central banks globally to tame inflation. The Federal Open Market Committee (FOMC) on Feb. 1 raised the target federal funds rate for the eighth time in less than a year, increasing the rate by 25 basis points to a target range of 4.5 percent to 4.75 percent, not far from a desired peak of “above 5 percent.”

The ceiling and the lower band of the target rate range are above core inflation for the first time since 2019, according to ING Economics.

In line with recent comments from the FOMC and Fed chairman Jerome Powell, analysts are predicting one or two more tempered increases of 25 basis points soon before the rate reaches its peak.

“At the same time, the economy continues to lose momentum and we suspect inflation will fall quickly from here, on a topping out of housing rents, lower car prices and a decline in corporate pricing power,”

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