Jerome Powell

Jerome Powell.


Jerome Powell

Chairman at the Federal Reserve

Last year's rank: 2

Jerome Powell
By May 10, 2024 8:50 AM

Virtually every word uttered during the past year by Jerome Powell weighed on the collective psyche of commercial real estate.

Powell, who has led the Federal Reserve since February 2018, continued the central bank’s hawskish strategy of combating inflation that began in early 2022 with four interest rate hikes in its first five meetings of 2023. While the Fed eventually held interest rates steady for six straight meetings starting in September, CRE market players have been eagerly awaiting signals from Powell that would indicate hope of rate cuts in the near future.

“The last two years’ historically abrupt tightening of monetary policy, and its reverberations along the yield curve and across capital markets, have defined real estate investment and lending conditions alongside secular shifts in how we use our spaces,” said Sam Chandan, director of New York University’s Chen Institute for Global Real Estate Finance. “At the helm of the Fed, no one plays a larger role in setting the Fed’s priorities than Jerome Powell.” 

Under Powell’s leadership, the Fed elevated benchmark interest rates from near zero in early 2022 to between 5.25 percent and 5.5 percent today, the highest borrowing levels in four decades. His efforts to battle rising inflation have had a considerable impact on the CRE capital markets, with transaction volume largely muted and many banks on the lending sidelines.

Following the Fed’s latest meeting on May 1, Powell said recent inflation readings have been above expectations. He therefore projected that it could take longer than prior forecasts before the central bank has full confidence that inflation is on a sustainable path toward a 2 percent goal. Powell has been consistent over the last two years in stressing 2 percent inflation as the Fed’s target. 

“Inflation is still too high, further progress in bringing it down is not assured, and the path forward is uncertain,” Powell said during his post-meeting press conference, dampening the spirits of CRE professionals across the nation and globally. “When we get that confidence, then rate cuts will be in scope. And I don’t know exactly when that will be.”

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