Last fall’s ebullience over the Federal Reserve’s likelihood of cutting the federal funds rate early and frequently in 2024 quickly faded as inflation remained too high for the Fed’s liking. Wall Street traders who make wagers on the Fed’s actions keep pushing their rate cut bets further into the year, according to CME Group, a derivatives marketplace. In early March, for example, nearly 75 percent of traders wagered on a rate cut in June. As of early June, less than 2 percent expected one. The most recent Fed meeting, on June 13, has confirmed this assumption that a rate cut is at least months away, if not longer. If and when the central bank cuts rates this year, the cost of capital is unlikely to approach the historically low levels of the last few years. As a result, the growing interest rate mantra of “higher for longer” may be finally convincing commercial property buyers and sellers to meet on pricing. New York-based research organization MSCI Real Assets recently noted that commercial property sales continued to slow in the first quarter of 2024 — a year-over-year decline of 16 percent to $78.9 billion. But it suggested that investors might be encouraged …
