Federal Reserve Interest Rate Cuts Coming Soon?
In April 2025, the Federal Reserve maintains the federal reserve interest at 4.25%–4.50%, reflecting economic resilience and inflation moderation rather than aggressive monetary easing.
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| Are Federal Reserve Interest Rate Cuts Coming Soon? |
Market participants have significantly cooled expectations for early or frequent cuts.
Inflation Is Still the Deciding Factor
Previous hopes for a rapid disinflation process were dashed by the January and February CPI data, which confirmed inflation at or above 3%, underpinned by stubborn shelter rents, wages, and price pressures in services.
Goods inflation has slowed, but overall price pressures have proven more stubborn, raising questions about any imminent shift. Core inflation is also running hot, keeping policymakers on alert.
FedCLR: Fewer, Later
Current projections from the major financial institutions expect at most two quarter-point cuts in 2025.
The most often mentioned candidates are June and December. But, this forecast is contingent and will be dependent on data on the employment front, wage growth, and consumer spending that rolls in over the coming months.
The Fed’s dot plot projections suggest that any path lower will be gradual, not a sudden pivot.
Impact of Federal Reserve Interest Cuts On Real Estate & Housing
After dipping back below 6.5% in late 2024, mortgage rates have risen above 7%, as concerns about inflation have resurfaced.
That swing keeps squeezing affordability, crimping homebuying, and putting a damper on refinance incentives. Credit conditions remain tight, forcing builders and sellers to adjust their expectations.
Mixed Results for Commercial Real Estate
Multifamily and industrial properties, like any easing talk, but office and retail remain bogged down by structural post-pandemic transitions.
Investors are closely tuned to the Fed because the cheap capital in late 2025 will play a major role in acquisition and development strategies.
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