What The FED Meeting and Banking News Means For Investors
Federal Reserve Raises Rates But Changes Tune
- The Federal Reserve once again raised the overnight rate by 25 bps at the May meeting, to 5.00%-5.25%
- Language in The Fed’s press release suggested the Fed is entering a “wait-and-see” approach as opposed to expecting additional hikes
Regional Banks Still Face Risks As Major Sale Occurs
- After customers withdrew $100B in Q1, First Republic Bank was seized by regulators and auctioned to JPMorgan Chase
- 61% of First Republic’s lending was in SF housing, 13% was multifamily and 6% was other CRE
Rate Stability To Aid Lenders and CRE Investors
- If the Fed stops raising rates, lenders and banks can begin to stabilize their lending standards
- Long-term demand drivers remain sound for the majority of CRE types
*Through May 04
Sources: Marcus & Millichap Research Services, Federal Reserve, CME Group
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