California CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Interest Rates Remain Unchanged, Fed Stays on Normalization Path
Interest rates were left alone following two days of U.S. Federal Reserve meetings, though the money policy group signaled one more increase by the end of the year. Rates have been bumped up twice this year.
Eleven of 16 Fed officials believe the “appropriate” level for the federal funds rate should fall in a range between 1.25% and 1.50% by the end of 2017. That would be 0.25 percentage points above the current level.
The Fed also will begin gradually paring down its portfolio of U.S. Treasury bonds and mortgage-based securities in October. Since the 2008 financial crisis, it built up roughly $4.2 trillion in balance sheet holdings.
The outlook for next year was essentially the same, with three rate rises in 2018, but the U.S. central bank now plans to slow the pace of monetary tightening to just two increases in 2019 and one in 2020. The estimated long-term “neutral” interest rate was also lowered again from 3% percent to 2.75%.
For comments, questions or concerns, please contact Dennis Kaiser
- ◦Economy
