The Federal Reserve cut its key interest rate by 25 basis points on Sept. 18, 2025, lowering it to a range of 4.00% to 4.25%. This is its first rate cut since December 2024 and comes as signs show the labor market is slowing down. Although job growth has cooled and inflation remains relatively high, the Fed sees risks to employment rising and wants to support the economy by making borrowing a bit cheaper.
Lower interest rates often help real estate investment trusts (REITs) because they reduce borrowing costs and improve cash flow, which can lead to higher dividends. The S&P 500 Real Estate sector ($SRRE) has gained 2.59% this year, reaching 262.56 as of Sept. 18, benefiting from these conditions.
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