The Federal Open Market Committee (FOMC) opted to maintain interest rates at their current near-zero levels and continue its monthly purchasing of $80 billion in Treasury securities and $40 billion in agency-backed mortgage securities for a total of $120 billion in bond purchases monthly.

“Our guidance for interest rates and asset purchases ties the path of the federal funds rate and the size of the balance sheet to our employment and inflation goals. This outcome-based guidance will ensure that the stance of monetary policy remains highly accommodative as the recovery progresses,” Powell said, adding, “We've been guided to promote maximum employment and stable prices for the American people along with our responsibilities to promote the stability of the financial system. The increase in our balance sheet since March 2020 has materially eased financial conditions and provided support to the economy.”

Overall, the Federal Reserve’s fiscal approach coupled with robust federal stimulus has succeeded in bolstering the economy’s health. Economic fundamentals like employment figures and GDP are improving in light of the global pandemic.

On the other side of the equation stands inflation. Powell indicated that the FOMC saw a chance for inflation to exceed 2% in the short term but called the increase “transitory,” saying it would not meet the standards for dampening the Fed’s accommodative policy.

The Federal Reserve’s plan to hold interest rates steady over the near term bodes well for multifamily lending, especially during a period of improving apartment vacancy and rent collections. According to Ariel Property Advisors’ most recent quarterly analysis, there has been significantly higher price discovery thus far this year. Contract executions for multifamily building sales in the first quarter showed a sizable increase, which points to higher transaction volume in 2021. Another tailwind for activity could be President Biden’s potential legislation surrounding the end of 1031-exchanges on capital gains exceeding $500,000 and the potential increases to capital gains taxes themselves.

Matt Swerdlow, Director of Capital Services at Ariel Property Advisors outlined that, “Specifically, for multifamily value added projects, lenders are now offering floating rate SOFR-based bridge loans with a whole coupon of around 2.25%, interest only. The transitional nature of bridge loans implies a high level of confidence in the asset class and various business plans over the next 12-24 months. We expect the same lenders to maintain their aggressive outlook on multifamily by providing leverage up to 75% - 80% LTV and in some scenarios, rates below 3% for 7-10 year, fixed rate terms.”

Signs are pointing to New York City’s recovery accelerating. Governor Cuomo has announced that 16 state-run vaccination sites would open for walk-ins beginning April 23. About 5.9 million New York City residents have already been vaccinated, compared to about 3 million in March, per city data. Indoor dining capacity for the city’s restaurants will increase to 75% as of May 3 and Governor Cuomo has eliminated state-wide restaurant curfews, among other things. Office capacity is also slated to increase to 75% in May.

Asked about the U.S. housing market generally, Powell responded that higher pricing was a function of limited supply and heightened demand, as Americans were in a much better position financially before the pandemic than they were before the Financial Crisis. He said he expected housing supply and demand fundamentals to recover as the pandemic draws to a close.

“It's part of a strong economy with people having money to spend and wanting to invest in housing. So in that sense it's good. It's clearly the strongest housing market we've seen since the global financial crisis,” Powell said of housing prices.

Developers are taking note of the cost of capital, and a refinancing wave is washing through some of New York City’s most prominent office towers. SL Green is reportedly negotiating a $2.25 billion refinancing package for its 1.7-million-square-foot One Vanderbilt office tower with Goldman Sachs and Wells Fargo, per media reports. It’s a staggering figure that is considered one of the largest loans for a New York City building in history. The deal comes on the heels of two recent refinancings by Vornado, for its office properties at 909 Third Avenue and One Park Avenue. Last month, CIM Group closed a $400 million refinance for its Times Square office building located at 1440 Broadway.

Meanwhile despite a major bump in availability, Manhattan office leasing is beginning to improve, according to brokerage data. About 4.5 million square feet of leasing volume closed in the first quarter of 2021, more than 9% more than the prior quarter. In Midtown alone, quarterly leasing volume amounted to 3.3 million square feet, the highest quarterly volume since the fourth quarter of 2019 for that submarket.

Following April’s latest guidance by the FOMC indicating the U.S. central bank’s intention to keep fiscal policy accommodative for the foreseeable future, there are plenty of reasons to be optimistic about a rebound both nationally and within New York City.