Long-Awaited Cut Has Positive Implications for Commercial Real Estate and Consumers

After reducing the overnight lending rate by 50 basis points in September, the Federal Open Market committee opted to cut again by half that margin at the November meeting. This returns the target lower bound to 4.5 percent — a level not seen since March 2023 — reflecting progress on both sides of the FOMC’s dual mandate for supporting price stability and full employment. While year-over-year core PCE inflation of 2.7 percent in September was still 70 basis points above the FOMC’s target, the labor market showed more signs of softening in October. Easing growth in employee compensation and real disposable income also indicate that pricing pressure may abate further.

Key Highlights Include:

  • Fed takes second step on gradual rate-lowering path
  • Election outcome raises new possibilities
  • New tariffs could raise costs for households and investors
  • Potential trade policies cloud near-term Fed outlook
  • Sales velocity already on improvement path

Marcus & Millichap’s Full Report:
Marcus & Millichap’s Research Brief: Financial Markets & Election Update