In this Shakespeare-inspired edition of The Chief Economist, BGO’s Ryan Severino examines the Fed’s dilemma over whether to cut interest rates. Inflation has been reaccelerating due to policy changes, particularly tariffs, but BGO maintains that labor market risks outweigh concerns about runaway prices. While inflation is ticking higher, it remains moderate, and rising uncertainty is slowing economic and job growth. Against this backdrop, the Fed appears poised to deliver a 25 bps rate cut, balancing its dual mandate of price stability and full employment.
For commercial real estate (CRE), BGO stresses that one small cut will not be a cure-all, but it represents a meaningful first step. The sector remains more dependent on long-term rates, yet even a modest shift in monetary policy could provide support to capital markets and ease financing conditions. BGO reaffirms its contrarian view that rate cuts are appropriate under current circumstances and could help stabilize both the economy and CRE performance.
Read the full article here: To Cut, or Not to Cut?