IGA Capital Weekly Market Update – March 31, 2025
- Joshua Hawley
- Mar 31
- 3 min read
Joshua Hawley
3 min read
Economic Overview
Market sentiment this week continues to focus on the Federal Reserve’s anticipated rate adjustments and the implications for capital markets. Current Fed Funds futures indicate expectations of rate cuts totaling approximately 50–75 basis points by the end of 2025. The implied Fed Funds rate is projected to decline from 4.28% in May to 3.59% by December, reflecting growing confidence that inflation will continue to ease.
Treasury yields saw a modest decline over the past week, with the 10-year Treasury yield falling by 8 bps to 4.20%. Market participants remain watchful of upcoming inflation reports and labor market data, which will heavily influence the Fed’s decision-making in the months ahead.
While the commercial real estate (CRE) sector continues to face headwinds from elevated financing costs, multifamily housing remains resilient, supported by strong rental demand and agency-backed lending activity.
Key Market Events This Week
April 1 – ISM Manufacturing, Construction Spending
April 2 – ADP Employment Change, Factory Orders
April 3 – Initial Jobless Claims, ISM Services Index
April 4 – Change in Nonfarm Payrolls, Unemployment Rate
Treasury & Credit Markets
Treasury Yields (as of March 31, 2025)
Maturity | Yield | Weekly Change |
2-Year | 4.07% | -4 bps |
5-Year | 3.93% | -12 bps |
10-Year | 4.20% | -8 bps |
30-Year | 4.55% | -7 bps |
The yield curve remains inverted, with the 2s/10s spread at -0.13%, reinforcing ongoing recessionary concerns. Fed Funds futures currently imply a policy rate of 4.11% by mid-year and 3.59% by December, suggesting at least two rate cuts by year-end.
Agency Loan Pricing (Fannie Mae & Freddie Mac)
Term | Fannie Mae (Tier 2 LTV) | Freddie Mac (Standard LTV) |
5 Years | 5.54% - 5.84% | N/A |
7 Years | 5.52% - 5.82% | 5.59% - 5.74% |
10 Years | 5.57% - 5.87% | 5.55% - 5.70% |
15 Years | 5.71% - 6.01% | 5.70% - 5.85% |
Multifamily loan pricing remains stable despite widening spreads, driven by continued rate volatility. Floating rate loans continue to require custom pricing, as agency lenders have paused publishing DUS ARM products.
REIT Performance (Key Observations)
Multifamily REITs: AvalonBay (AVB) and Equity Residential (EQR) maintained stable performance amid resilient rental demand, though concerns over regulatory pressures persist.
Mortgage REITs: Annaly (NLY) and AGNC (AGNC) continue to generate attractive yields but remain exposed to ongoing rate risk.
Storage REITs: Public Storage (PSA) and Extra Space Storage (EXR) continue to demonstrate strong performance, reflecting steady demand in the self-storage sector.
Outlook for Borrowers & Investors
Interest Rate Forecasts: Market participants remain divided on the timing and magnitude of Fed rate cuts, but the consensus suggests that borrowing costs will gradually decline in the coming quarters.
CRE & Debt Markets: Loan spreads remain elevated, and refinancing continues to pose challenges for highly leveraged borrowers. However, resilient asset classes such as multifamily and industrial real estate continue to attract capital.
Investment Strategy: Investors should continue prioritizing structured financing solutions that provide flexibility and downside protection in an environment of evolving rate expectations.
IGA Capital remains a trusted partner in providing structured financing solutions across multiple sectors, including real estate, energy, infrastructure, and technology. Leveraging an extensive network of global banks, private credit funds, and family offices, IGA Capital delivers customized capital solutions tailored to clients’ evolving needs.
If your business is seeking structured financing solutions of $10M or more, contact IGA Capital today to discuss how we can help you navigate today’s capital markets.
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