How Another Fed Cut Fuels Optimism for Year-End & Future Growth

The Fed's Recent Move and Its Impact on the Economy

On October 29, 2025, the Federal Open Market Committee (FOMC) decided to cut the federal funds rate by 25 basis points, lowering it to a range of 3.75% to 4%. This decision is viewed as a strategic response to economic indicators suggesting a slower job market and rising inflation, which currently remains above the FOMC's target levels. Specifically, Jerome Powell, the chair of the Federal Reserve, noted that there is no "risk-free" approach to balancing employment and inflation, indicating that the committee's decisions are thoughtful responses rather than set formulas.

Uncertainties Ahead: A Complex Economic Landscape

The outlook moving forward, particularly concerning a potential December rate cut, remains nuanced. During a press conference after the latest FOMC meeting, Powell indicated that future cuts are not guarantees, as diverse opinions within the committee reflect differing perspectives on economic conditions. This reality highlights the complexities and challenges facing policymakers as they navigate between fostering employment growth and controlling inflation.

A Resilient Economy Despite Trade Challenges

Amid ongoing uncertainties, some experts express a more optimistic outlook. Allan Swaringen, president of JLL Income Property Trust, has observed that the broader economy is showing resilience, even in the face of tariff pressures. He asserts that the equity market remains robust and thrives despite potential trade policy disruptions. Moreover, alternative data sources hint at a stabilizing housing inflation trend, easing some fears about a looming recession.

What This Means for Commercial Real Estate

The latest rate cut appears to be already influencing the commercial real estate (CRE) sector positively. Experts report that transaction volumes across various property types are increasing, with some tenant markets, especially in major cities like New York and San Francisco, witnessing an uptick in activity. Joe Biasi from Newmark pointed out that lending volume is up a striking 48% compared to last year, suggesting a return to normalization and increased investor confidence.

Looking Ahead: The Need for Stability

While the recent cuts have been felt throughout the market, there remains a call for sustained action to ensure long-term stability. Industry professionals agree that another potential cut could provide much-needed momentum to revive deal-making in commercial real estate, helping investors to navigate the uncertain landscape and drive confidence across the sector.