A New Voice at the Federal Reserve
In May 2026, Kevin Warsh became Chair of the Federal Reserve, succeeding Jerome Powell. The Senate confirmed Warsh on May 13 in a narrow 54-45 vote, and he was sworn in on May 22. The transition matters for every commercial real estate borrower and investor watching interest rates, because Warsh brings a fundamentally different communication philosophy to the role.
Powell was known for telegraphing rate decisions well in advance. Warsh has publicly stated he believes central bankers have been too transparent and wants the Fed to become a more reserved institution. For CRE borrowers, that means less forward guidance and more uncertainty around rate moves.
Where Rates Stand Right Now
The federal funds rate currently sits at 3.50% to 3.75%, down from peaks above 5% in 2023 and 2024. Warsh's first meeting as Chair is the June 16 to 17 FOMC, where markets broadly expect the committee to hold rates steady.
The path for the rest of 2026 is genuinely uncertain. The committee is split, and some participants now see at least one rate hike as possible this year rather than the cuts markets anticipated earlier. Under new leadership with less forward guidance, borrowers should not count on near-term relief.
What This Means for Bridge Loan Rates
Bridge loan rates currently range from 8.5% to 13%, depending on leverage, borrower experience, property type, and lender structure. Most investment property bridge loans fall between 10% and 12%.
These rates are set by private lenders, not directly by the Fed. But the federal funds rate influences the cost of capital that bridge lenders deploy. If rates stay elevated longer than expected, bridge loan pricing stays elevated. If the Fed eventually cuts, borrowers may see modest relief on new originations within 60 to 90 days.
CRE Credit Conditions Remain Tight
Recent data shows credit performance on small business loans and CMBS remains weak, with FHA mortgage delinquencies elevated. That backdrop makes banks cautious about new CRE originations, which is precisely why private bridge lenders are filling the gap.
Bridge lenders are underwriting more carefully than in prior years. Loan-to-value ratios are commonly capped at 60% to 65%, and lenders are prioritizing capital protection over yield. Borrowers with strong sponsorship, clear business plans, and realistic exit strategies still close in two to four weeks.
How Borrowers Should Respond
The practical takeaway is straightforward. Do not wait for rate cuts to pursue deals with strong fundamentals. The spread between bridge loan rates and permanent financing rates means your exit strategy matters more than your entry rate. A bridge loan at 11% that closes in three weeks and positions you for a DSCR refi at 6.5% in 12 months is a better outcome than waiting six months for a rate cut that may not come.
If you are evaluating a bridge loan for a commercial property, Requity Lending can provide terms within 24 hours. We structure loans based on the deal, not the headline rate environment.