What the Federal Reserve Tapering of Asset Purchasing Means for CRE?
November 2021
Video Highlights
Since COVID, the Fed has been buying $120B per month of bonds and MBS/CMBS to support market liquidity, backstop lending and encourage economic growth.
Per Jerome Powell’s announcement last week, the central bank will reduce purchasing by $15B every month with plans to cease all together in the summer of 2022.
This change was largely signaled to the market and did not have an immediate and dramatic impact on rates. Moving forward, the move is expected to put upward pressure on interest rates.
This gradual rate increase will likely not be enough to meaningfully impact CRE investment activity.
Investors considering acquisition, refinance, or capital re-deployment should consider locking in interest rates while they’re still low.