This past week, the Fed Chairman Jerome Powell was interviewed by 60 Minutes. See link below. 

 Fed Chair Jerome Powell shares why Fed hasn't yet cut interest rates | 60 Minutes - CBS News

The details:

Powell committed to not decreasing rates until the rate of inflation lowered to around 2%.

He says price stability is the main focus of Fed.

He acknowledges the Fed was too slow to raise rates and his previous calls that inflation was ‘transitory’ were not accurate.

“Not likely” rates will be lowered in Fed Committee Meeting in March.

“Prices will not decline” (referring to basic essentials, ie food etc).

US Debt / fiscal situation is ‘unsustainable’.

He suggests the first interest rate cut will come around the middle of the year.

Our take: I’ll refrain from any truly harsh opinion on this interview. It does feel like a bit of a puff piece, and I remain skeptical as to how long the economy can sustain these interest rate levels without feeling considerable pain. As is, the real estate market feels stagnant which helps prices, but puts pressure on all the businesses in those particular industries. Just as he admits he was ‘too late’ to quell inflation, I believe they will be equally as late to lower rates.

As it relates specifically to commercial estate, I simply don't see how pricing won't be effected negatively and the potential for bank defaults as loan maturities come due. 

We plan on following this closely in the coming year(s) and will blog as appropriate. 

For more information on Everett Commercial Real Estate, consider contacting an Everett Commercial Real Estate broker. 

Our Firm: 

Weitz Commercial

108 Union Ave

Snohomish, WA 98290

Scott@weitzcommercial.com