The TreppWire Podcast: A Commercial Real Estate Show 272. From Wall Street to Y'all Street: Economic Shifts, Hotel Woes, & Office Loan Challenges
Aug 16, 2024
Dive into the economic landscape as recent inflation and labor data spark discussions about market volatility. Explore the alarming rise in hotel delinquencies in San Francisco compared to the booming financial scene in Texas. Discover the implications of a significant SASB loan facing special servicing and Vornado's refinancing intentions in Manhattan. Stay tuned for insights into the changing dynamics of commercial real estate, particularly the challenges posed by vacant office spaces and retail struggles.
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Interest Rate Predictions
- The market expects the Fed to cut rates by year-end, but the size of the September cut is uncertain.
- A smaller cut suggests a steady pace of cuts, while a larger cut could signal economic weakness.
Impact of Rate Cuts
- Large rate cuts could be perceived as a sign of economic weakness, potentially triggering a recession.
- A 25-basis point cut may be the optimal balance between stimulating the economy and maintaining market confidence.
Inflationary Pressures
- Despite lower inflation, prices remain high due to past increases.
- Cutting rates too quickly could worsen inflation, creating a difficult situation for the economy.