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Fed Rate Hikes Typically Compress Cap Rate Spreads. Should Investors Be Worried?

Moderately High Inflation Increases Relative Value of Commercial Real Estate, Even As Cap Rate Spreads Compress
Federal Reserve Chairman Pro Tempore Jerome Powell testifies on Capitol Hill this month. Powell's nomination for a second four-year term as chairman is pending confirmation by the Senate. (Getty Images)
Federal Reserve Chairman Pro Tempore Jerome Powell testifies on Capitol Hill this month. Powell's nomination for a second four-year term as chairman is pending confirmation by the Senate. (Getty Images)
By Joseph Biasi
CoStar Advisory Services
March 17, 2022 | 9:46 P.M.

The first of several expected increases in interest rates announced Wednesday by the Federal Reserve is an important step in controlling inflation, which has persisted well above the central bank’s target of 2%, leading the consumer price index to hit its highest reading in 40 years.

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