NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss expects a rate cut from the Federal Reserve in the coming months.
"I don't think they're going to do it in July, but the economy is just too weak for the Fed to keep interest rates this high," Goss said. "They're saying they defeated inflation. Well, they haven't defeated inflation, but weakness is a bigger problem than inflation right now."
The continued struggles of commercial real estate are just one area of the economy that a rate cut might help, in the long run.
"In commercial real estate, a lot of it's related to office space," Goss said. "Of course, that's not as much of an issue in this part of the country as it is in some of the big urban centers like San Francisco, New York, and others. So, in this part of the country, the real estate sector is not nearly in as much trouble here as nationwide, and we're going to see some of that going forward."
There are still some levers that the Fed can pull on to try to get the 'soft landing' they are looking for.
"They're going to pull on the interest rates," Goss said. "That's not the more important one right now. It's others that we're going to see, and that would be in terms of the balance sheet, the Federal Reserve's balance sheet. But right now, they're going to have to adjust some of it, and they're going to have to move fairly quickly now in my judgment once they begin. I think they will begin in September, but it's not going to have enough of an impact on the housing market to reduce the interest rates on the housing market."
The next two-day meeting of the Federal Open Market Committee is July 30-31.
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