FED DELIVERS KEY MESSAGE FOR CRE INVESTORS
New Inflation Data Shifts to Positive Trajectory
- Following “bumpy” inflation readings that put rate cuts on hold, the downward inflation trajectory reasserted in May
- The CPI inflation reading released on June 12th showed CPI and Core CPI falling; Core CPI hit lowest level since April 2021
Federal Reserve Signals Potential Rate Cut in 2024
- On the June dot-plot, fifteen of the nineteen members of the committee suggested the overnight rate will end this year lower than where it is today
- Wall Street has baked-in a 60% likelihood of a rate reduction coming at the September Fed meeting
Federal Reserve Remains Cautious
- Although the Fed appears optimistic about the prospect of a rate cut this year, the messaging remains cautious and dependent upon future inflation and economic readings
- Chairman Powell stated that even one cut will be very consequential to financial markets, so they will only pull the trigger if they strongly believe inflation is under control
*Through May
Sources: Marcus & Millichap Research Services, BLS
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