Inflation Still Looks Tame – Should the FED Cut Rates?

Markets Eye Multiple Fed Cuts Amid Stable Inflation​

Inflation Still Elevated But Stable Despite Tariff Concerns​

• July headline inflation at 2.7%, core inflation at 3.1%​

• No major tariff-driven spikes in inflation subcategories yet​

• Corporate earnings suggest tariff-related costs may filter through to consumers later​

Markets Expect Multiple Fed Rate Cuts​

• Over 90% probability of a 25 bps cut to fed funds rate in September​

• 40% chance total cuts reach 75 bps by year-end​

• Labor market weakness adds pressure for cuts​

Lower Rates Could Unlock CRE Investment Activity​

• Fed cuts don’t always translate directly into lower 10-Year Treasury yields​

• Cap rates remain elevated compared to 2022 market peak​

• Lower cost of debt could spur deal flow and pressure cap rates down​

As of August 14, 2025​
Sources: Marcus & Millichap Research Services, CME Group​

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