Federal Reserve: Jerome Powell's Scoop

Marc Perlof • November 4, 2023

Hey, Retail Real Estate Rockstars!


Federal Reserve Chairman Jerome Powell, shared some big news on Wednesday, November 1, 2023, that's buzzing in the financial world. He talked about what the Federal Reserve is doing to keep our economy growing while fighting off high prices. Let’s break it down for our retail real estate owners:


  • Tightening Money Rules: The Fed has increased the interest rate by 5.25 percentage points and cut down on holding securities to battle high prices. By doing this, they are putting a slow on economic activities which might affect how much money people have to spend for a while.¹


  • Strong Economic Activity: Good news! The economy is showing strength with a 4.9% boost in real GDP during Q3 2023, thanks to people spending more.² This could mean more people walking into retail stores.


  • Job Market Holding Strong: Even with higher interest rates, the job market is steady with an unemployment rate of 3.8%.³ When people have jobs, they have money to spend in retail places.


  • Future Rate Increases?: Powell is being careful about increasing rates further. He will look at new data, how the economy is doing, and weigh the risks before deciding. For retail real estate owners, future rate hikes could affect loan costs, consumer spending, and overall investments. Keeping an eye on the Fed's moves is key to making smart decisions in our lively retail real estate market.¹


These snippets from Powell’s talk are worth thinking over. The tighter money rules might mean less spending but also a chance for drawing in investments or refinancing properties at higher interest rates. Plus, the strong economy and job market are good signs for retail real estate, showing a friendly scene for shoppers and businesses alike.


Hey Retail real estate owners, now's your chance to plan ahead! Whether it's sprucing up your property to draw a crowd or looking at new financing options, making wise moves now could lead to big wins. Talk to market pros like myself, to understand how the Fed’s moves could affect your properties. Now's the time to make your retail real estate shine. Call, Text, or DM me to talk about this in detail.


How are you gearing up your retail real estate to succeed as the money policy scene changes?


#RetailRealEstate #MonetaryPolicy #EconomicGrowth #RetailStrategy #RealEstateInsights


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Footnotes:

1. Federal Reserve Press Conference, November 1, 2023. Federal Reserve Chair Jerome Powell’s Speech Transcript.

2. U.S. Bureau of Economic Analysis, Real Gross Domestic Product, Third Quarter 2023.

3. U.S. Bureau of Labor Statistics, Unemployment Rate, September 2023 Report.

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