Last week’s speech by Fed Chair Janet Yellen offered some clues about the timing of an interest rate rise. It seems September has become a possibility (50% in my eyes), but this will also be determined by Friday’s August employment number. There appears to be a stable supply of capital from banks, portfolio lenders, and CMBS lenders, offering opportunities for borrowers to secure loans near historic lows.
Though if there is a hike in September, this will slightly alter what we have seen in this low rate environment for quite some time now, which will have an impact, albeit slightly, on the ability for our customers, clients, and prospects to secure financing, and the potentially signal a rise in Cap rates on investment properties.
Since Yellen does not want to “mess” with the election, she may forgo September and look to November/December for a rate hike of 0.25%, but will also likely guide that there will be more hikes in 2017….possibly 2 or 3 which is important for us to keep an eye on.