The fulfillment of anticipation is almost here. The likely expectation is that the Federal Reserve's Federal Open Market Committee will cut interest rates. The probability of a 25-basis-point cut according to 30-day fed funds futures pricing via CME FedWatch is 69%, with a 31% expectation of a 50-basis-point cut.

Even as many in CRE have looked to rate cuts as a bailout from the difficulty of refinancing, it's unclear how much favorability they can expect and how quickly.

First, the amount of any cut will be small, at least to start. FedWatch shows a 77.5% chance of a total cut between 100 and 125 basis points by the December 12, 2024, meeting. Is that enough of a rescue? It would depend in part on how much of a spread lenders decide to maintain. Clark Finney, vice president and director of Matthews Real Estate Investment Services, wrote that the ultimate effects are unclear because the "impact on asset values is complex."