Each month I publish a market analysis combining real-time economic data with its direct impact on Florida's private real estate lending market. This is the May 2026 report.
The Fed: extended pause, data-dependent bias
At the April 28-29 meeting, the FOMC held rates in the 3.50%-3.75% range with a unanimous vote. It marks the third consecutive meeting without changes, following the three cuts in 2025 (June, September, and December) that brought the rate from 4.50% down to current levels.
The April statement confirms the data-dependent bias amid mixed signals: resilient economic activity but core inflation that isn't fully converging to the 2% target. The next meeting is June 16-17, and it includes the Summary of Economic Projections (SEP) — the dot plot will reveal whether members maintain, accelerate, or postpone the cut they projected in March.
Key rates this month:
- Fed Funds Rate: 3.50%–3.75%
- Treasury 10Y: ~4.46%
- 30Y Mortgage: ~6.36%
- Treasury 2Y/5Y/30Y forming a normal curve
Inflation: sticky core PCE, headline CPI pressured by tariffs
Inflation data shows a divergent pattern across metrics:
- Headline CPI (YoY) runs near 3.8%, with transitory pressure from tariffs and services costs
- Core PCE (YoY) remains around 3.2% — more than one point above the Fed's 2% target
- Markets are pricing in that the Fed lacks room to accelerate cuts until core PCE approaches 2.5%
For private lending investors, this backdrop is favorable: long rates elevated but stable, and a sustained positive spread over alternatives such as CDs and Treasuries.
Real estate market: Florida holding strong on solid fundamentals
Nationally the housing market continues to show mixed signals:
- Housing Starts moderating with mortgages near 6.36%
- Case-Shiller still showing year-over-year appreciation, though decelerating
- Existing Home Sales staying at low levels due to rate friction
Florida remains the positive outlier: favorable net migration, investment demand from Latin America and Europe, and robust activity in fix-and-flip, bridge loans, and construction. Demand for private financing stays firm.
Private Lending: the current landscape
The estimated yield for private lending in Florida remains around 9% annually, with a significant spread over alternatives:
| Instrument | Yield |
|---|---|
| Private Lending (Florida) | ~9.0% |
| S&P 500 (10Y CAGR) | ~13.5% |
| Treasury 10Y | ~4.46% |
| HYSA | ~3.25% |
| CD 12 Months | ~3.42% |
The advantage of private lending isn't just the yield: it's the combination of predictable monthly cash flow + tangible collateral (first lien mortgage) + short terms (~12 months).
Outlook for June
What to watch:
- June 16-17 FOMC decision — Hold or cut? The SEP will show whether March projections (one cut in 2026) hold
- Inflation data — May CPI and PCE will confirm whether tariff-driven pressure moderates
- Employment — Nonfarm payrolls and jobless claims as a gauge of economic resilience
- Credit spreads — High Yield OAS and IG OAS to anticipate shifts in risk appetite
For live updated data, visit the Monthly Report page where indicators are automatically updated with Federal Reserve (FRED) data.
This analysis is for informational purposes only and does not constitute financial advice. Past returns do not guarantee future results.
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