The Chief Economist: Central Bank Central

In this global outlook edition of The Chief Economist, BGO’s Ryan Severino analyzes recent moves by major central banks and their implications for interest rates, yields, and commercial real estate (CRE). The Federal Reserve cut its policy rate by 25 bps and announced an end to quantitative tightening, while the Bank of Canada followed with its own rate reduction. Across the UK, EU, and Japan, monetary policies remain cautious but supportive, as inflation moderates and growth steadies. BGO’s analysis emphasizes that while central banks are diverging in timing, the common trend is toward easing — a positive signal for long-term investors.

For CRE, BGO’s proprietary forecasting models indicate further cap rate compression ahead across global markets, driven by stabilizing long-term yields and the early stages of a capital markets recovery. Even in Japan, where monetary policy is less accommodative, the outlook remains constructive. BGO underscores a consistent pattern: when central banks stop raising rates, total CRE returns shift positive, and when cuts begin, gains accelerate. With policy turning more dovish worldwide, BGO projects sustained CRE strength and improving return prospects through 2026.

Read the full article here: Central Bank Central