In the wake of the Federal Reserve’s decision to keep interest rates unchanged, here’s a roundup of how the development is being digested across the real estate and financial markets.
“Some are questioning the decision of the Fed to keep borrower rates unchanged due to global concerns. With employment and inflation near targets, if the Fed would have raised rates, it would have given a level of confidence to the market that would likely have led to a rally. Instead, the market fell flat and volatility continues.” — Nikki Vasco, Chief Investment Officer at FullCapitalStack.com.
“There was a lot of speculation over the rate decision and many of our clients wanted to avoid closing in and around the Fed announcement. Many accelerated closings for last week or earlier this week, while some chose to push off into next week and roll the dice post rate decision and post digestion of Fed Chairman Janet Yellen’s commentary. We did have a few defeasances that priced on Thursday and the clients who elected to buy defeasance securities in the morning were rewarded with higher yields/cheaper defeasance costs.” — Jeff Lee, Chief Operating Officer, Commercial Defeasance LLC
“You had a window, and you risk that between now and December you have things deteriorate, or you have some new and unexpected source of volatility. If something happens and they are not able to go in December, there is a credibility issue.” — Brian Rehling, fixed-income strategist at Wells Fargo Investment Institute.
“The Fed did the right thing last week: nothing. And the howling of the bankers should be taken not as a reason to reconsider, but as a demonstration that the clamor for higher rates has nothing to do with the public interest.” — Paul Krugman, New York Times columnist
“I dissented because I believe that an increase in our interest rate target is needed, given current economic conditions and the medium-term outlook. Further delay would be a departure from a pattern of behavior that has served us well in the past. The historical record strongly suggests that such departures are risky and raise the likelihood of adverse outcomes.” — Jeffrey Lacker, President of the Federal Reserve Bank of Richmond (the sole dissenter in the Open Market Committee’s recent vote)