Episode 23: 10-Year Treasury at 4.29%, Down 0.01% From Yesterday

Welcome back to What's Hot & What's Not CRE — your daily pulse on commercial real estate in America. It's Wednesday, January 21st, 2026. Today we're following the bond market — because where the 10-year Treasury goes, CRE follows. 🔥 What's Hot — Treasury Stability Unlocks Deal Flow: Treasury at 4.29% — The 10-year Treasury yield sits at 4.29% today, down 0.01% from yesterday; after late 2024 volatility, Treasury is settling into the 4.0%-4.3% range CRE investors have been waiting for; this stability is the green light the market needed Deal Volume Returning — CRE investment activity projected to increase 16% in 2026, potentially reaching $562 billion — nearly matching pre-pandemic levels; bond market stabilization is unlocking transaction flow; buyers and sellers can finally underwrite with confidence Cap Rate Compression Ahead — With Treasury yields stabilizing, cap rates expected to compress 5-15 basis points; industrial and Class B multifamily leading the way; bid-ask spread is narrowing Multifamily Debt Markets Robust — Lenders are back; senior loans yielding 8-10% providing attractive risk-adjusted returns ❄️ What's Not — Headwinds Remain: Fed Uncertainty — Don't expect aggressive rate cuts; J.P. Morgan expects Fed to remain on hold through all of 2026 at 3.5-3.75%; Goldman Sachs slightly more optimistic, forecasting cuts in March/June to 3-3.25%; Fed's own dot plot suggests just one 25 bps cut this year Inflation Still Sticky — Annualized inflation at 2.7%, still above Fed's 2% target; Fed doesn't expect to hit target until 2028; higher-for-longer is the reality Rising Construction Costs — Interest rates and construction costs squeezing developer margins; project viability challenged; new supply will remain constrained Fed Chair Transition — Jerome Powell's term expires May 15th; new Fed Chair selection could introduce volatility; watch this closely 📊 Why It Matters: The 10-year Treasury is the benchmark for CRE. At 4.29%, we're in a zone that works — not great, but workable. The key insight: stability matters more than the absolute level. When the 10-year bounces between 3.8% and 4.5%, nobody can underwrite. When it sits steady around 4.2-4.3%, deals get done. A stable 10-year in the 4.0-4.25% range with inflation around 3% is supportive for commercial real estate. 💡 Investor Takeaway: Treasury stability at 4.29% is bullish for deal flow. Expect cap rate compression of 5-15 bps. Don't count on aggressive Fed cuts — higher-for-longer is the base case. Focus on income-producing assets that work at current rates. The transaction market is thawing — be ready to move. Thanks for tuning in. See you tomorrow! Don't forget to Like, Share and Subscribe! Visit hotnotcre.com to learn more and subscribe to our newsletter.