The Fed Is Holding Its Ground—Good News for Real Estate?

Min 1

Federal Reserve Chair Jerome Powell has told associates in no uncertain terms: he is not stepping down before his term ends in May 2026. That’s despite weeks of public and private pressure from the White House to slash interest rates—and personal attacks that would drive many people to throw in the towel.

Powell’s stance isn’t just about pride. It’s about the integrity of the Federal Reserve. He’s argued that resigning now would damage the institution’s independence and undermine the idea that monetary policy decisions are made based on data, not political pressure. That independence, hardwired into the Fed’s design since 1913, is the guardrail that keeps interest rates from becoming a political football.

For real estate investors, independence matters more than most people realize. It means borrowing costs aren’t going to seesaw based on election-year talking points. Instead, rates will adjust based on hard economic numbers: inflation, jobs, and growth.

Min 2

But the pressure on Powell is real—and very public. He’s been criticized almost daily for refusing to cut rates immediately, and the White House has even spotlighted the Fed’s $2.5 billion headquarters renovation project in Washington as a way to question his leadership.

Here’s the irony: the renovation—years in the making—isn’t all that unusual. The Fed’s headquarters dates back to 1937. Think about what’s changed since then: we’ve been to the moon, the internet was born, and construction codes have been overhauled countless times. The project’s cost is steep, but it’s roughly the price of a single new NFL stadium. Still, the attacks have been effective at turning the building’s price tag into a talking point.

This political theater matters because it raises market volatility. Sellers start hoping for quick cuts, buyers hold back waiting for “the moment,” and deal volume freezes. Powell knows this cycle—and that’s why he’s determined not to flinch.

Min 3

It’s worth remembering how we got here. The Fed raised rates aggressively in 2022 and 2023 to bring down inflation, pushing mortgage rates from the mid-3% range up toward 7%. That move cooled the housing market and made debt more expensive for commercial projects, but it also kept inflation from spiraling out of control.

Now inflation is finally moderating, yet Powell has been reluctant to declare victory and cut too soon. “The best defense for the Fed is to get the policy right,” says Bill English, a former top Fed official. He’s right: if the Fed cuts too early and inflation roars back, borrowing costs could spike again.

For investors, patience here could pay off. Powell’s discipline helps ensure that when rates do begin to come down, they’ll stay down. That’s the kind of predictability investors need to model returns and lock in favorable long-term financing.

Min 4

There’s also a silver lining for dealmakers. Many sellers have been holding on, hoping that rate cuts will lift valuations. But with Powell holding firm, more of those sellers are beginning to adjust expectations. Properties that seemed overpriced six months ago are quietly seeing price reductions.

This isn’t just happening in housing. Commercial owners of office and retail properties—already under pressure from high vacancy—are finding fewer buyers willing to pay top dollar. Cap rates are slowly widening, and investors with cash or creative financing options are finding opportunities they wouldn’t have had in 2021.

Here’s a fun fact: every 1% change in interest rates can shift commercial property values by as much as 10%. That means even the hint of cuts could swing the market. Powell’s “steady as she goes” approach keeps you from chasing the market and gives you time to structure deals properly.

Min 5

The big takeaway: the Fed’s independence is a stabilizing force in uncertain times. Yes, the wait for rate cuts is frustrating. But the alternative—monetary policy that bends with the political wind—would inject far more volatility into real estate markets.

If you’re in the business of building, buying, or financing properties, you should welcome Powell’s resolve. It gives you space to negotiate better terms, hunt for value-add projects, and get creative while others sit on the sidelines.

History favors the investors who act while the crowd is paralyzed by uncertainty. Powell’s decision to stay the course is a reminder that good deals often happen before the headlines turn optimistic. Use this time wisely: analyze markets, build relationships with lenders, and be ready to move when the numbers make sense.

Because when the Fed finally does start cutting, you’ll want to be holding the assets everyone else is suddenly desperate to buy.

See you tomorrow,

-The 5