CEO of McNeill Investment Group, Germantown, TN, is Christopher Ropko.”I don’t think traditional bank originations will significantly rise starting in 2023, especially considering the recent instability of regional and community banks.” Private and non-traditional originations are anticipated to rise in 2024 as a result of the predicted natural “end of lifecycle” transaction activity.
Glencove Capital, New York City; Glyn Aeppel.”Considering the rapid rise in interest rates and the patience of banks, debt originations have reached an all-time low. However, in 2024, there will be deals that require debt financing due to stress and slowly declining rates. In New York City, a handful of sales are beginning to occur, and more will come.
Possibility of rate reductions
Although fixed-rates have quickly improved—10-year Treasury notes are down 80 basis points from their October 2023 highs, and CMBS spreads are down 75 basis points from their November highs—HREC stated that there is little chance of additional interest rate reductions.
HREC noted that despite falling spreads, floating rates—which are closely correlated with the Fed Funds rate—remain stubbornly high. It also noted that conference attendees were less confident than they had been in December about the likelihood of large Fed cuts in 2024.
Possibility of rate reductions
Although fixed-rates have quickly improved—10-year Treasury notes are down 80 basis points from their October 2023 highs, and CMBS spreads are down 75 basis points from their November highs—HREC stated that there is little chance of additional interest rate reductions.
HREC noted that despite falling spreads, floating rates—which are closely correlated with the Fed Funds rate—remain stubbornly high. It also noted that conference attendees were less confident than they had been in December about the likelihood of large Fed cuts in 2024.
Mount Greg.As was evident to all of us a few days ago, Powell stated that he believed the central bank would start reducing borrowing prices in 2024, but that before taking any action, officials needed to be convinced that inflation had to be controlled.
Gregory Friedman.”I believe that at this month’s meeting, the Federal Reserve will maintain the current rates. Data will probably play a major role in determining future decisions, especially when it comes to the need for and timing of rate decreases. Although it is improbable that the Fed will achieve its 2% inflation objective this year, a rate cut is still anticipated in the second half of the year.