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Falling U.S. interest rates offer opportunities for investors

April 01, 2019

To cut or not to cut; that is the question. On Friday, President Trump called on the Federal Reserve to immediately cut interest rates. While U.S. interest rates are just below 2.5 percent—low by historical standards but at the highest they’ve been in more than 10 years—Trump has asked them to be at about 2 percent, according to news reports. But the Fed has answered that now’s not the time to cut rates.

That said, the Fed has shifted its policy outlook and interest rates have fallen, according to a Marcus & Millichap report. At its latest meeting in March, the Fed indicated that it would end rate hikes during 2019, but potentially increase rates one-time next year. The Fed also intends to end the runoff of its balance sheet, also known as quantitative tightening.

That has opened opportunities for investors, according to Marcus & Millichap analysts, as borrowing costs fall and buyers attempt to re-examine deals that couldn’t pencil last fall.

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