Under former chairman Alan Greenspan, the Fed's statements have included talks of a "measured hike." Since January, the wording has been removed from the statements and industry followers have wondered if it meant the country, and the Federal Reserve, was moving into its target range, explains Janice Stanton, senior managing director of Cushman & Wakefield's Capital Markets Group.
Today's statement explains there is "the potential to add to inflation pressures" and leaves the door open for the Fed to raise rates again in May, although "it's not a foregone conclusion," Stanton adds. "It's basically saying 'let's see what happens with inflation.'"
Recent increases have been similar to the quarter-percent hike seen today. Stanton says that now "we're in the target range and expect to see more modest movement."
As for the increase's affect on commercial real estate, Stanton says "no news is good news. Our industry doesn't like surprises, and this was predictable so it's a good thing." She explains that despite continuous changes in the short-term rates, the long-term rates have been "relatively stable."
She adds that Greenspan, who served as chairman for 18 years, was a known commodity and industry followers knew what he was saying when he issued his statements. "Today, people paid more attention to the statement than to the numbers."
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