Pappas Realty Co... "Commercial Real Estate...Exclusively" in Northeast Ohio since 1957

Monday, August 21, 2006

Fed Holds Line On Rates, But Is It Too Late?

The economic slowdown that inspired the Federal Reserve to pause after two years of interest rate hikes could soon escalate to a recession, economists warn. Meanwhile, commercial real estate professionals welcomed the news as a sign that the brisk volume in investment sales will continue uninterrupted.

On Tuesday, the Federal Open Market Committee (FOMA) let the overnight Fed funds rate stand at 5.25%. The committee had raised the rate 25 basis points at each of its previous 17 meetings since June 2004.

The move was largely anticipated, as evidenced by the 10-year Treasury yield’s drop to below 5% in the week preceding the meeting. Nonetheless, the Fed’s announcement brought a sigh of relief from most commercial real estate professionals, including Eric Anton, senior managing director at New York-based Eastern Consolidated, a full-service real estate investment services firm.


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