Commercial Real Estate Faces Rising Borrowing Costs as Fed Hikes Rates

The Federal Reserve raised its benchmark interest rate by 0.25 percentage points on Wednesday, bringing the federal funds rate to a target range of 3.75% to 4%. Fed Chairman Kevin Warsh said policymakers expect to hold rates steady throughout 2027, though the central bank’s quarterly projections show the potential for one more increase later in 2026. The unanimous vote marks the first rate increase since 2023, driven by inflation running at 3.4% in August—well above the Fed’s 2% target. The Iran conflict has pushed up global energy prices and fueled broader inflation across the economy.   ...more

RSK: Okay, I was wrong but still feel right. The interest rate hike will do little to curb inflation especially in CRE. The largest factor is oil prices unless the feds feel this will bring them down by opening up the straights of Hormuz.