T
he Federal Reserve reduced its benchmark interest rate by a quarter point this week, marking the third cut of the year. This move mirrors last month's quarter-point decrease and follows a half-point drop in September. Despite the latest cut, economists are now forecasting only two more reductions next year, down from their previous projections of four cuts.

    The Fed's decision to slow down rate cuts is largely due to stable inflation rates, which have remained relatively unchanged over recent months. However, some analysts believe that potential policy changes proposed by Donald Trump could lead to increased inflation and further interest rate hikes. For now, the real estate sector will welcome the latest rate cut as a relief from rising borrowing costs.

    The multifamily market is expected to benefit from this development, with Kevin Fagan of Moody's noting that favorable borrowing conditions are emerging due to "near record" absorption projected for next year. Industry experts emphasize the importance of clarity provided by the Fed in the short term, but also stress that more significant rate cuts would be needed to address refinancing issues related to commercial real estate loans.