The U.S. Federal Reserve maintained its interest rates Wednesday.

The Federal Open Market Committee, which oversees the central bank’s monetary policy, kept the federal funds target rate at 5.25% to 5.50%, a level at which it has stayed since last summer following 11 increases that began in 2022.

The FOMC comprises Fed chief Jerome Powell and the heads of its regional reserve banks.

The expected decision has widespread commercial real estate implications for Canadian investors who are highly active in the U.S. and Canadian lenders who have extensive operations in the country while servicing American and international clients.

Although the rate hold was anticipated, the FOMC’s statement on the rate hold was far more hawkish than expected as the central bank countered the market’s dovish stance.

“The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” the statement read.

However, the committee did allow for cuts at some time. The risks of achieving the Fed’s dual mandate are “moving into better balance.”

The probability of an interest rate cut in March dropped to 43% following the announcement from 62%.

The FOMC decision could affect the timing of the Bank of Canada’s interest rate cuts, which are expected at some point this year. The BoC has been paying close attention to the Fed as it contemplate rate cuts.

In its latest decision, the Canadian central bank kept its key overnight rate at 5%. The BoC also adopted a softer stance on hikes after indicated that it could increase to get inflation closer to 2%.

Some Canadian lenders have already started offering mortgages at rates below 5%.

With files from Joe Palmisano, Connect Money