Fed votes to lift rates by quarter of a percentage point

Miami /
Mar.March 15, 2017 04:45 PM

From the New York website: In an unsurprising move, the Federal Reserve increased its benchmark interest rate to a range between 0.75 and 1 percent on Wednesday.

It’s the third time the Fed has raised interest rates since the 2009 financial crisis. Officials indicated they are expecting to raise rates at least twice more this year, the New York Times reported. Last year, the central bank flagged its plans to raise short-term interest rates more aggressively throughout 2017.

The raise followed a two-day meeting of its policy-making committee. In a statement, the Fed highlighted the recent increase in inflation, saying the domestic economy is expanding at a “moderate pace.” It continues to forecast an unemployment rate remaining at 4.5 percent and inflation at around 2 percent for the next two years.

Officials also said they expect interest rates will settle at an average 3 percent by the end of 2019, the Wall Street Journal reported, which is a little earlier than previously projected.

The president of Federal Reserve Bank of Minneapolis Neel Kashkari voted against the raise, but the Fed’s statement did not give a reason.

“The simple message is, the economy is doing well,” said Fed chair Janet Yellen at a press conference after the announcement, according to the Wall Street Journal.

Higher short-term interest rates generally spill over into higher long-term rates, which raises the cost of real estate financing and pushes cap rates up, generating downward pressure on real estate prices. [NYT] and [WSJ] Miriam Hall


Related Articles

arrow_forward_ios
Blink’s Michael Farkas and Lionstone’s Diego Lowenstein with 605 Lincoln Road (Google Maps)
Blink buys office condo on Miami Beach’s Lincoln Road for new HQ
Blink buys office condo on Miami Beach’s Lincoln Road for new HQ
Photo courtesy of David Iglesias
Boca Beach House condo project scores $43M construction loan
Boca Beach House condo project scores $43M construction loan
Nick Rojo and Jeff Burns (Affiliated, iStock)
Affiliated Development launches $125M workforce housing fund
Affiliated Development launches $125M workforce housing fund
Tom Cabrerizo and 6790-6880 Southwest 80th Street (Google Maps)
Developers score $15M construction loan for Miami townhouse development
Developers score $15M construction loan for Miami townhouse development
Triton Center (iStock)
Questions surround $50M in EB-5 investments tied to former INS building: lawsuit
Questions surround $50M in EB-5 investments tied to former INS building: lawsuit
Michael S. Liebowitz and Russell Galbut (Linkedin)
Russell Galbut and partner launch blank check company, plan to raise $100M
Russell Galbut and partner launch blank check company, plan to raise $100M
Southland Mall, 20505 South Dixie Highway in Cutler Bay with JLL's Tom Hall and Danny Finkle (Google Maps, JLL)
Southland Mall’s troubled $65M CMBS loan for sale
Southland Mall’s troubled $65M CMBS loan for sale
Alan Ojeda and 8894 NW 44 Street in Sunrise (Google Maps)
Rilea Group scores $46M construction loan for Sunrise apartments
Rilea Group scores $46M construction loan for Sunrise apartments
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...