Fed cuts in doubt — macro hit
Economists now say Fed rate cuts this year are less likely as the Iran conflict and oil shocks lift inflation expectations — multiple outlets flagged the changing outlook ahead of the next FOMC reported reported reported. That increases mortgage‑rate stickiness and keeps capital costs elevated for acquisitions and developments.
Traders have pulled a September cut off the table and are now pricing only one cut in December, not midyear. (cnbc.com) Market-implied odds show a near-certain hold at the March meeting — the 3.50–3.75% range priced at roughly 99.6% for March 18 — with the FOMC scheduled for March 17–18, 2026. (investing.com) The 30‑year fixed mortgage averaged 6.11% as of the March 12 survey, keeping long‑term borrowing costs materially above pre‑cut expectations for CRE buyers. (freddiemac.com) CMBS conduit loan pricing is running roughly 6.0%–8.5% and most stabilized, investment‑grade industrial loans are quoting near 6.25%–7.25%, with 10‑year Treasury yields around ~4.15% and AAA spreads about 75–105 bps over swaps. (clearhouselending.com) Colliers’ Q4 2025 Inland Empire report shows vacancy at 7.6%, availability at a 14‑year high of 11.7% after 4.3M SF of new supply, and average asking rents down roughly $0.60 per SF from the Q2 2023 peak. (colliers.com) Cap rates in recent Inland Empire transaction briefs sit near ~7.0% with average sale prices reported around $273.29 per SF, signaling buyer yield demands that reflect higher financing costs. (kidder.com) Colliers also records construction activity in the Inland Empire dipping below 5M SF in Q4 2025 while third‑party analysis shows new starts collapsing (down over 50% in some trackers), tightening the development pipeline if rates remain elevated. (colliers.com)
