Why Are Commercial Mortgage Loan Rates Not Increasing?

Over the past nine months the Fed has increased the Federal Funds rate by 1.25%, yet commercial mortgage loan rates on CMBS quality deals have increased less than 25 basis points.   Ten year Treasuries currently yield 4.2%, just a stone throw's from where they sat nine months ago.  Gold fell by over $8 per ounce yesterday.  What gives?

Clearly the markets are anticipating less inflation than the news services are suggesting.  The forces of deflation remain strong, as $33 trillion in US debt must be serviced monthly.  This huge debt service requirement sucks money out of the money supply at a rate almost faster than the Federal Reserve can create and the Federal government can spend.  There is a huge anchor around the neck of the American economy, and the bond markets are anticipating a sharp slowdown.

The good news is that if you own a commercial property, you have not missed the bottom of the market for long term rates.  It is still possible to lock in a historically fabulous long term fixed rate.  To find the rates of 750 commercial mortgage lenders, just come to C-Loans.