Hospitality Investing News - Southwest April 2025

While the pace of hiring is slowing, the 4.1 percent unemployment rate reflects a labor market that is still broadly tight. At the same time, inflation pressures have remained stubbornly in place, with the year-over-year change in the PCE index holding in the 2.5 percent to 2.6 percent band since November of last year. Moderating job growth but ongoing above-target inflation are both likely to keep the Federal Reserve from adjusting its overnight lending rate this month — an outlook widely shared by Wall Street. The potential inflationary impact of recently enacted and planned tariffs also lowers the likelihood for cuts in the near future. Amid concerns of escalating trade tensions on the U.S. economy, long-term bond yields have been decreasing. After peaking at 4.8 percent in January, the yield on the 10-year Treasury had fallen below 4.3 percent in early March. As a common benchmark for commercial real estate lending, this downshift could help take in borrowing costs slightly, allowing more transactions to pencil. Many investors are focused on the 10- year reaching 4 percent, a consensus point at which more investment sales that require financing could take place.