Keeping a close eye on the interest rates and forecasts for commercial loans can help you find the most practical solutions for your company. The Federal Reserve is responsible for the monetary policy of the United States and sets the bond interest rates for the country. This determines the interest rate paid by banks for currency and, by extension, the rate you will pay for your commercial lending arrangements. Taking a look at the current predictions for commercial interest rates can provide you with the guidance you need to make the right moves in the financial marketplace.
The Effects of the Trade War
According to the experts at Kiplinger, the current trade war in place in the international economy will prevent any big moves by the Fed until the fallout from these policies has been determined. This will reduce the likelihood of interest rate cuts or hikes for the short-term rates set by the Fed over the course of 2019 and through the beginning of 2020.
Kiplinger analysts believe an economic slowdown is on the way. Growth in GDP is expected to dip from 2.5 percent this year to 1.8 percent in 2020. If a trade agreement between China and the United States is not reached, however, this could further depress the economy to prompt an interest rate decrease on the part of the Fed. Long-term interest rates for 10-year Treasury notes, however, are expected to increase by about .4 percent by the end of 2019.
Mortgage Rates and the Housing Market
With the mortgage rate marketplace showing definite signs of softening in recent months, Forbes is expecting the housing market to weaken even more over the rest of 2019 and into 2020. This is likely to lead to steady rates for commercial and residential mortgages during the next couple of years. With fixed rates for residential mortgages holding steady at around 5.1 percent, this will likely add up to increased stability for commercial loans in the financial marketplace.
With interest rates generally remaining unchanged throughout the commercial mortgage industry, finding ways to improve the terms or flexibility of your loans will likely become much more important in the upcoming year.
The Continuing Importance of Alternative Loans
Alternative lenders will continue to have a major impact on the commercial lending marketplace by offering specialized terms and added accessibility for business borrowers. These loans can be structured to provide your company with the most practical options when managing your financial arrangements and obtaining the best commercial loans for your business.
Alternative lenders can often provide funding when traditional sources of financing are unavailable. These lending solutions are an ideal way to obtain the funds necessary for your business enterprises and to stay competitive in your chosen industry.
As a commercial investor, making sure that you can access the funding you need is critical to your ongoing success. Exploring your options and keeping an eye on interest rates will ensure that you make the right moves for your financial future.