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Our ApproachIn a June 18 policy decision, the Federal Reserve held its benchmark interest rate steady at 4.25% to 4.50%. According to Reuters, the Fed’s updated projections now indicate two rate cuts in 2025, down from three earlier in the year. Officials cited slower job gains, modest GDP growth, and persistent inflation—compounded in part by proposed import tariffs—as key considerations. Fed Chair Jerome Powell emphasized a cautious, data-driven approach to any future easing, noting that inflation remains elevated despite recent moderation.
Our Take
From our perspective, the Fed’s message highlights an important shift: while lower interest rates are still likely, they won’t be coming as quickly or as easily as many hoped earlier this year. For investors in private credit and real estate, this slower path has real implications. Borrowing costs could stay elevated longer, which affects everything from loan terms to how deals are structured.
Private credit managers may need to adjust their expectations around how much return they can earn relative to risk, especially if companies face more expensive debt for longer. And for real estate investors, particularly in areas like logistics and infrastructure, it’s more important than ever to focus on properties that generate stable, inflation-resistant income. That means being selective, keeping debt levels reasonable, and planning carefully for refinancing down the road.
In short, the Fed’s latest update reminds us that the path forward isn’t straightforward. But for patient, thoughtful investors, this kind of environment often leads to opportunities—especially when others are still adjusting their expectations.
If you’re curious about how our approach could fit into your portfolio, visit our website or schedule a call to connect with our team. We’d love to talk through what we’re seeing and where we’re going next.
