Three-Peat: Fed Cuts Interest Rates Once Again

True to predictions, the Federal Reserve cut its benchmark interest rate by a quarter point for the third time in three months.

The Wednesday vote executed on one of three cuts the central bank previously signaled would come in 2025. In its September meeting, central bank officials hinted at more interest rate cuts before the end of the year.

But after the October meeting, Fed chair Jerome Powell said there were “strongly differing views about how to proceed in December.”

“A further reduction in the policy rate at the December meeting is not a foregone conclusion,” Powell said at the time. “Far from it.”

Turns out, real estate had nothing to worry about.

A majority of the Federal Open Market Committee voted for the quarter-point cut, but the decision was not unanimous for the second straight month.

Stephen Miran, a Fed governor and close ally of President Donald Trump, again voted for a larger cut, while two governors voted against any cut, one more governor on that side of the debate than the last meeting. The three dissents were the most in more than six years.

“Available indicators suggest that economic activity has been expanding at a moderate pace,” the Fed said in a statement, adding that inflation “has moved up since earlier in the year and remains somewhat elevated.

Elevated interest rates dragged down real estate in recent years, particularly in the commercial sector. Many in the industry are bullish on how lower rates could lead to commercial transactions and unlock supply in the housing market, but some observers are hoping they have further to fall.

“The rate cut today is a good step, but real estate transaction volumes will benefit more when the 5-year and 10-year rates drop further; they rose a little in advance of today’s cut because investors are concerned about future cuts depending on the economic outlook,” Russ Flicker, AWH Partners co-founder and managing partner, said in a statement.

After hiking rates in the wake of the pandemic, the Fed announced a half-point cut last fall, only to hit the pause button in favor of efforts to control inflation.

In recent months, Trump and his allies have attempted to assert influence over the Fed.

The president put pressure on the institution, attacking Powell and hinting that expensive renovations of the bank’s headquarters were a potential means for his removal.

He’s also attempted to fire one of the Fed’s governors, Lisa Cook, for alleged mortgage fraud. That attempt has been unsuccessful so far, though the Supreme Court is expected to shed more light on the situation next month.

Additionally, Powell’s term as Fed chair ends in May and Trump has made no secret about what he expects from the next leader of the central bank. The lack of data stemming from the government shutdown further confused matters.