The FOMC maintained the federal funds rate at 3.50% to 3.75% at its April meeting, though the decision exposed disagreements within the Committee. While one governor pushed for a 25-basis-point cut, three regional presidents voted to maintain rates but resisted including an 'easing bias' in the announcement. Despite a resilient economy and a steady 4.3% unemployment rate, inflation remains a persistent headwind. Headline PCE climbed to 3.5% in March because of rising energy costs, while core PCE, excluding the volatile food and energy categories, sat at 3.2%, hampered by ongoing tariffs in the goods sector. Both metrics are above the 2% target.

Shimon Shkury, President and Founder of Ariel Property Advisors; Victor Sozio, Founding Partner; and Matthew Dzbanek, Senior Director in the Capital Services Group, take a deep dive into New York City’s multifamily market on this episode of Coffee & Cap Rates.

At its March meeting, the Federal Open Market Committee (FOMC) held the federal funds rate steady at 3.50% to 3.75%, though the decision was not unanimous, as one member voted for a 25-basis-point cut. The Fed’s latest Summary of Economic Projections (SEP) showed several key indicators unchanged from the December SEP: 12 of the 19 participants still anticipate at least one rate cut this year and the median projection for the end of 2026 remained at 3.4% for the funds rate and 4.4% for unemployment. However, growth and inflation expectations shifted slightly upward, with median GDP projections rising to 2.4% (from 2.3%) and core PCE inflation climbing to 2.7% (from 2.5%).