Ed Brock is an award-winning journalist who has worked for various U.S. newspapers and magazines, including with American City & County magazine, a national publication based in Atlanta focused on city and county government issues. He is currently assistant editor at Asian Hospitality magazine, the top U.S. publication for Asian American hoteliers.
Originally from Mobile, Alabama, Ed began his career in journalism in the early 1990s as a reporter for a chain of weekly newspapers in Baldwin County, Alabama. After a stint teaching English in Japan, Ed returned to the U.S. and moved to the Atlanta area where he returned to journalism, coming to work at Asian Hospitality in 2016.
ANOTHER YEAR IS done and a new year, and a new decade, begins for the U.S. hotel industry. In 2019, leadership at AAHOA changed with the installation of the association’s first Chairwoman Jagruti Panwala and the selection of a new president and CEO. Several large hotel companies, including Red Lion Hotel Corp. and Wyndham Hotels & Resorts Inc., saw shakeups at the top as well.
New legislation affecting the industry passed amid political turmoil that had ramifications, and some direct impact, on the industry. And many Indian Americans welcomed the prime minister of India to the U.S. for historic “Howdy Modi” event.
This is a review of some of the major headlines in our publication for this past year.
Asian American owned companies continue to advance
Several prominent Asian American owned companies saw advances in 2019.
In March, the chief executives at hotel development and management company NewcrestImage, Chairman and CEO Mehul Patel, CFO Chirag Patel and managing partner Mital Patel, purchased American Bank in its home base of Dallas. In July, the company announced a nationwide, $2 billion expansion of its portfolio that was followed by numerous acquisitions throughout the year and plans to build its first hotel in India.
Oklahoma City, Oklahoma-based Champion Hotels, under founder and CEO Champak “Champ” Patel, helped lead the charge on developing InterContinental Hotels Group’s new avid brand, the pipeline for which reached than 180 properties in 2019. Champion Hotels opened the first avid hotel in August north of Oklahoma City, and later opened an avid near the city’s Will Rogers International Airport and partnered on a third avid hotel that opened the same week in Tulsa, Oklahoma.
In August, Columbia, Maryland-based Baywood Hotels, under President Al Patel, began construction on its first hotel development using the modular building technique. The five-story, 145-room Hilton Garden Inn San Jose/Fremont in Fremont, California, is expected to open later this year, will include a full-service restaurant and bar and 12 EV charging stations.
And in November, after Tru by Hilton opened its 100th property, Chattanooga, Tennessee-based Vision Hospitality Group’s President and CEO Mitch Patel offered his comments on the brand in a Q&A with Talene Staab, vice president and global head of Tru. Hilton launched Tru in 2016, and that same year Vision Hospitality broke ground on a 98-room Tru in McDonough, Georgia, south of Atlanta, as part of McDonough Hotel Partners LLC. Since then the company also has opened a Tru in its hometown of Chattanooga, Tennessee, and it is one of several Asian American-owned companies to support the brand’s growth.
New leadership, new direction for AAHOA
At its 2019 AAHOA Convention & Trade Show in San Diego in April, AAHOA swore in Panwala as its first chairwoman. She recounted to the crowd her impressions of her first AAHOA convention in Atlantic City 18 prior.
“From the moment I stepped in the door, I knew that I was not alone, that none of us are alone while pursuing our dreams as hoteliers,” Panwala said. “Many good leaders in the hotel industry who saw all the education and resources AAHOA offered opened my eyes to all that I could do as a hotelier.”
The association board also rotated positions during the convention and AAHOA members elected eight other new members to three-year terms on the board:
Director at Large – Prashant Patel
Young Professional Director Western Division – Miraj S. Patel, MBA, CHO, CHIA
Alabama Regional Director – Sanjay M. Patel
Central Midwest Regional Director – Hitesh Patel
Gulf Regional Director – Nick Zaver
North Carolina Regional Director – Akshat A. Patel
Northwest Regional Director – Hiten Patel, CHO
Washington, D.C., Area Regional Director – Sandip Patel
In November, AAHOA also picked its new President and CEO Cecil Staton, a former Georgia legislator and Chancellor Emeritus at East Carolina University in Greenville, North Carolina. He succeeded previous President and CEO Chip Rogers stepped down in January.
One month into the job, Staton told Asian Hospitality he was still absorbing knowledge on the association’s more 19,300 members and a staff of nearly 40 staff members.
“My first few weeks here have been great. I’ve gotten to know the officers, the board of directors and the professional staff, and I’ve begun speaking with more members and some of our partners,” he said. “This association attracts remarkably dynamic people, both as members, partners and employees, and I am enjoying meeting as many of them as I can.”
Changes at the top
The year saw departures of top executives from several hospitality companies, some voluntary and others resulting from dissatisfaction with the companies performance.
In May, Wyndham’s La Quinta Brands President Rajiv Trivedi announced he would retire to spend more time with his family. The company’s Senior Vice President for Design and Construction Krishna Paliwal, who came to Wyndham from La Quinta, assumed Trivedi’s position.
Trivedi’s announcement in came a little more than a year after Wyndham acquired the La Quinta brand.
“After 20 years of leading La Quinta, I have decided to step aside to spend more time with my family,” Trivedi said in a video to franchisees. “This is entirely my decision, and one I feel blessed to be able to make.”
The departure of RLH Corp. President and CEO Greg Mount in November was less voluntary. The company’s deemed it a “necessary action” to restore confidence in the company.
“The board recognizes the operational performance of the company has not progressed as anticipated. Action was necessary, starting with a search for a new CEO,” Chairman of the Board Bob Wolfe said at the time.
One month later, Wolfe also stepped down to retire as RLH Corp.’s Independent Director R. Carter Pate succeeded him. John Russell, Jr. is serving as interim CEO until Mount’s full time replacement is selected.
Also in December, Radisson Hotel Group President for the Americas Ken Greene stepped down for personal reasons. Radisson has begun searching for Greene’s replacement, the company said, giving few details on what led to his resignation.
More changes for Wyndham occurred in December with the departure of Hotels & Resorts Chief Financial Officer David Wyshner, who said he would be moving into a senior advisory role reporting to President and Chief Executive Officer Geoff Ballotti until March 1. The company’s Treasurer and Executive Vice President Michele Allen will succeed Wyshner.
In the same week, Expedia Group CEO Mark Okerstrom and CFO Alan Pickerill resigned after they disagreed with the company’s board of director over the direction the company should take. And Extended Stay America reported that Bruce Haase would succeed Jonathan Halkyard as its new president and CEO. No explanation was given for Halkyard’s departure.
Finally, Peter Kwong was elected as the new chairman of Best Western Hotels & Resorts’ board of directors. Kwong previously served as vice chairman and has been a Best Western owner for 25 years.
Legislative action taken
A range of new laws and legislative actions were taken in 2019 with impacts on the nation’s hotels. They dealt with long-standing issues, such as the long-standing issue of clearly defining joint-employer status and Brand USA, a public-private partnership that promotes travel to the U.S.
In April, the U.S. Department of Labor created a new rule to clarify joint-employer status while another federal agency, the National Labor Relations Board, was in the process of preparing its own rules. The board’s definition of joint-employer status has been in limbo since Feb. 26, 2018, when the NLRB vacated its 2017 decision in Hy-Brand Industrial Contractors Ltd. and Brandt Construction Co. in response to a court finding that one of the board members had a conflict of interest in that case.
As a result, the board’s definition on joint employers under the National Labor Relations Act and the Fair Labor Standards Act reverts to the 2015 Browning-Ferris Industries case, which the Hy-Brand decision had overruled.
The new Labor Department rule essentially establishes a four-factor test based on precedent to determine if two entities meet standards that make them joint employers of a shared labor pool. It would be added to The Fair Labor Standards Act and would be the Labor Department’s first major revision of its joint employer regulation since 1958.
Congress approved Brand USA’s reauthorization in December and the bill was awaiting President Trump’s signature to become law. The Brand USA Extension Act of 2019 will extend funding for the program through 2027 and increase the fees paid by international travelers for pre-authorization programs that fund the partnership.
The bill’s sponsors, U.S. Sens. Roy Blunt (R-Mo.), Amy Klobuchar (D-Minn.), Cory Gardner (R-Colo.) and Catherine Cortez Masto (D-Nev.), said Brand USA has brought 6.6 million incremental international visitors to the U.S. since 2013. It brought $48 billion into the economy and supporting around 52,000 annually, according to Blunt’s office.
Other proposed legislation during the year includes an act to change the name of the U.S. Visa Waiver Program, which allows pre-screened travelers from participating countries to travel to the U.S. for stays of up to 90 days, to the Secure Travel Partnership. That bill’s sponsors, Reps. Tom Rice (Republican-South Carolina) Mike Quigley (Democrat-Illinois), Raja Krishnamoorthi (Democrat-Illinois), and Guy Reschenthaler (Republican-Pennsylvania), say it would improve security and bring economic benefits by encouraging travel to the U.S.
A similar proposed bill, The Secure Traveler Act, would expand the TSA PreCheck program that allows pre-cleared air travelers to pass through airport security more quickly. The U.S. Travel Association endorsed the bill, saying it could reduce security line wait times in the nation’s airports.
The Employee Flexibility Act will provide more work opportunity by freeing employers from having to provide medical insurance for those looking to earn more money by adding or trading shifts, gaining the endorsement of the American Hotel & Lodging Association. Also, the Labor Department announced a new rule under the Fair Labor Standards Act that will qualify 1.3 million U.S. workers for overtime pay, which AAHOA said would benefit small businesses and create clarity and consistency.
On a local level, California in April proposed a ban on complimentary toiletry bottles in hotels in the state. It comes when many hospitality companies have already started ditching the little plastic bottles for more sustainable options.
Along with new laws passed and proposed, politics played positive and negative roles in the lodging industry throughout 2019.
Discord meets unity
Early in 2019, conflicts between President Donald Trump and Democrats in Congress led to a federal government shutdown that hit the hospitality and travel industries. It led to a loss of pay for more than 800,000 federal workers and closed national parks, leading AAHOA to issue a statement urging a resolution to the conflict.
“Travel expenses for employees at affected agencies cannot be paid during the shutdown which means less revenue for the hospitality sector. Many of our national parks and museums are closed, and hotels surrounding them will see dwindling occupancy rates which impact hoteliers, their employees, and their families,” said then President and CEO Chip Rogers at the time.
Later in 2019, Trump’s on hospitality company, Trump Hotels, pulled its plans to build the first of two new brands in Cleveland, Mississippi, a Scion and two American Ideas, citing the effect of political attacks on the company. That left the developers of the project, Chawla Hotels of Cleveland, in the lurch.
The Chawlas, brothers Dinesh and Suresh, put the best face on the situation.
“We’re fine financially. We’re on schedule to open this fall,” Dinesh Chawla said in a Facebook post at the time. “You guys see all the whirlwind of activity out there on the construction site. With a bit less rain, we’d be cranking it even more.”
The fate of all the Cleveland projects remained unclear at the close of 2019. The company’s website was “closed for construction” and it saw other problems later in the year when Dinesh was arrested in August on charges he stole luggage from other passengers at the Memphis airport.
In October, the two brothers split the business with Suresh bringing 12 of the company’s properties, not including the luxury project, into his new management group, Delta Lodging Group LLC, according to the Mississippi Business Journal.
The former Scion is now called The Lyric under Dinesh’s side of the business, and in a Facebook post in January he is seen working in the office that still is under construction.
However, international politics in 2019 led to a historically upbeat moment for the Indian American community when as Indian Prime Minister Narendra Modi came to Houston in September. The Howdy Modi tour drew throngs of members of the community in a patriotic celebration for both countries.
Members of the Texas India Forum and other local groups organized the event with more than 1,000 volunteers and 650 Texas-based organizations helping. The crowds came despite the city being paralyzed the day before by Tropical Storm Imelda.
Trump and Modi held hands as they entered the arena and the two leaders were very complimentary toward each other on the stage. Modi, who heads India’s Bharatiya Janata Party, invoked the president’s “Make America Great Again” slogan as he hailed the state of the U.S. economy and the U.S.-India relationship.
“You can feel the strength and depth of the bonds between our two nations,” Modi said
Growth continues
Despite concerns about the industry slowing in the next two or three years, several new brands were introduced during 2019.
In February, G6 Hospitality unveiled a new design for its Motel 6 and Studio 6 brands that could make it easier for owners to combine them as dual-brands. They can convert from a single to a dual-brand property or alter the mix of a dual-brand between rooms for transient guests on their Motel 6 side and suites for extended-stay guests on the Studio 6 side, depending on the business trends they see in their locations, with no extra construction costs.
Hilton launched its Signia brand in 2019, focused on attracting meetings and events, the same month. In March, Wyndham introduced its “Moda” prototype for its Microtel by Wyndham brand during the Hunter Hotel Conference in Atlanta.
IHG launched its new upper-midscale hotel brand Atwell Suites in May, looking to fill what it called an unmet $18 billion market. In September it announced that the brand was now available for franchising.
Hyatt Hotels Corp.’s lifestyle brand Caption by Hyatt debuted in October. In May, the company formed a new division dedicated to promoting its lifestyle brands.
Choice Hotels International reported Q2 net income of $81.7 million.
Domestic RevPAR fell 2.9 percent due to macroeconomic conditions.
Extended-stay portfolio rose 10.5 percent YoY, with a domestic pipeline of 43,000 rooms.
CHOICE HOTELS INTERNATIONAL reported second-quarter net income of $81.7 million, down from $87.1 million a year earlier. Its forecast for the year remained positive, but was downgraded some to account for changes in macroeconomic conditions.
The company’s global pipeline exceeded 93,000 rooms, including nearly 77,000 in the U.S. Its global system size grew 2.1 percent, including 3 percent growth in the upscale, extended-stay and midscale segments, Choice said in a statement.
“Choice Hotels delivered another quarter of record financial performance despite a softer domestic RevPAR environment, underscoring the successful execution and diversification of our growth strategy,” said Patrick Pacious, president and CEO. “We are especially pleased with our strong international performance, where we have achieved significant growth and accelerated global expansion through a recent strategic acquisition, the signing of key partnerships, and entry into new markets. With more diversified growth avenues, enhanced product quality and value proposition driving stronger customer engagement and a leading position in the cycle-resilient extended-stay segment, we remain well-positioned to deliver long-term returns for all our stakeholders.”
Domestic RevPAR declined 2.9 percent, reflecting macroeconomic conditions and a difficult comparison with 2024 due to the timing of Easter and eclipse-related travel, the statement said. Excluding those effects, RevPAR fell approximately 1.6 percent. Meanwhile, the domestic extended-stay portfolio outperformed the broader lodging industry by 40 basis points in RevPAR, while the economy transient portfolio exceeded its chain scale by 320 basis points.
Adjusted EBITDA rose 2 percent to $165 million, or $167 million excluding a $2 million operating guarantee related to the Radisson Hotels Americas acquisition. Adjusted diluted EPS increased 4 percent to $1.92, the statement said.
Expansion and development
The domestic extended-stay portfolio grew 10.5 percent year over year, with a pipeline of nearly 43,000 rooms as of June 30, Choice said. The combined domestic upscale, extended-stay and midscale portfolio grew 2.3 percent. WoodSpring Suites expanded 9.7 percent to nearly 33,000 rooms and ranked first in guest satisfaction among economy extended-stay brands in the J.D. Power 2025 study. The domestic economy transient pipeline increased 8 percent to more than 1,700 rooms.
Choice acquired the remaining 50 percent interest in Choice Hotels Canada for approximately $112 million in July, funded through cash and credit. The deal expanded its Canadian brand portfolio from eight to 22 and added 327 properties and more than 26,000 rooms. The business is expected to contribute approximately $18 million in EBITDA in 2025.
International activity included a renewed master franchise agreement with Atlantica Hospitality International in Brazil for more than 10,000 rooms; a direct franchise deal with Zenitude Hotel-Residences in France, which nearly tripled room count and two agreements with SSAW Hotels & Resorts in China. These include a 9,500-room distribution deal for 2025 and a master franchise agreement projected to add 10,000 rooms over five years.
Global net rooms for upscale brands increased 14.7 percent year over year, the statement said. The pipeline for these brands rose 7 percent since March 31 to nearly 29,000 rooms.
2025 outlook
Choice revised its RevPAR outlook to reflect more moderate domestic expectations due to macroeconomic conditions, the statement said. The adjusted EBITDA forecast includes a $6 million contribution from the Choice Hotels Canada acquisition for the remainder of 2025. It also reflects the $2 million Radisson-related operating guarantee payment incurred in the second quarter.
Net income guidance was lowered to a range of $261 million to $276 million, down from $275 million to $290 million. Adjusted net income remains at $324 million to $339 million.
Domestic RevPAR growth was revised to between negative 3 percent and flat, compared to the earlier range of negative 1 percent to positive 1 percent. The global net system rooms growth projection remains at approximately 1 percent.
In May, Choice reported 2.3 percent year-over-year growth in domestic RevPAR for the first quarter.
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G6 Hospitality and Galaxy Hotels Group are expanding Motel 6 and Studio 6 in the U.S.
Galaxy said G6 brands outperform others in guest satisfaction and value.
One Galaxy hotel generates $8–10M annually; the full G6 portfolio is expected to reach $50M.
G6 HOSPITALITY AND Galaxy Hotels Group are now working to expand the Motel 6 and Studio 6 footprint in the U.S. About 10 Galaxy-managed hotels, totaling more than 1,300 rooms, will operate under the G6 brands, with more to follow.
G6 brands consistently outperform others in guest satisfaction and value, said Galaxy, which rejoined the G6 network after a short break.
“This partnership marks a new chapter in our mission to deliver modern, value-driven hospitality, as we now proudly rejoin G6 Hospitality," said Carlos Cuevas, Galaxy Hotels' COO. "Having previously moved from Choice Group/Park Inn by Radisson, we’ve closely compared the performance of various franchises. Our experience and data show that G6 brands consistently outperform others in guest satisfaction and value. This is why we’re back."
Recent additions include Studio 6 Suites Las Vegas with 308 rooms, Motel 6 Las Vegas – I-15 Stadium with 139 rooms and Motel 6 Las Vegas – Boulder Highway with 160 rooms, the companies said. Studio 6 Suites Las Vegas on the Strip, with more than 300 rooms, will be one of the largest Studio 6 hotels in the U.S., while Motel 6 Las Vegas is also near the Strip and Allegiant Stadium. The portfolio also includes Motel 6 hotels in Modesto, San Jose and Santa Rosa, California and Lakewood, Fort Collins, Thornton and Colorado Springs, Colorado.
Texas-based Galaxy Hotels Group, founded in 1999 and led by CEO Jagmohan “Jag” Dhillon, operates more than 41 hotels in the U.S. One Galaxy hotel in the G6 network generates $8 to 10 million in annual revenue. The full G6 portfolio is expected to reach about $50 million.
OYO CEO Ritesh Agarwal is chair of G6 Hospitality and Sonal Sinha is its CEO. OYO added more than 150 hotels to its U.S. portfolio in the first half of 2025 and plans 150 more by year-end.
Choice launched two campaigns to boost bookings across its four extended-stay brands.
Based on guest feedback, the campaigns focus on efficiency, cleanliness, value and flexibility.
They will run through 2026 across social media, Connected TV, digital display and online video.
CHOICE HOTELS INTERNATIONAL launched two marketing campaigns to increase brand awareness and bookings across its four extended-stay brands. The "Stay in Your Rhythm" campaign promotes all four brands by showing how guests can maintain daily routines, while "The WoodSpring Way" highlights the service WoodSpring Suites staff provide.
The company has more than 550 extended-stay locations open, 51 under construction and more than 350 in the pipeline under Everhome Suites, MainStay Suites, Suburban Studios and WoodSpring Suites, Choice said in a statement.
"As leaders in the extended stay segment, Choice Hotels has long understood that this category is unlike any other in the hospitality industry, defined by distinct guest expectations that we continuously strive to exceed," said Noha Abdalla, Choice’s chief marketing officer. "These first-of-their-kind campaigns reflect our deep understanding of why people stay longer — from work assignments and relocations to life transitions and personal journeys. No matter the reason, we know our guests aren't looking to escape their routines; they're looking to maintain them. That's why we take pride in our unique position to offer what matters most: consistency, comfort and connection."
Both campaigns are based on research and guest feedback showing travelers prioritize efficiency, cleanliness, value and flexibility, the statement said. They will run through the rest of the year and into 2026 across paid social media, Connected TV, digital display and online video.
The "Stay in Your Rhythm" campaign shows how Choice's extended-stay brands support routines with in-room kitchens, laundry, fitness centers and pet-friendly options, Choice said. It focuses on daily habits like making coffee, cooking, walking the dog, or exercising.
"The WoodSpring Way" highlights how property teams support guests by providing home-like conveniences, the company said. General managers in Chicago, Denver, Atlanta and Orlando are featured for creating a consistent guest experience and welcoming all guests, including pets.
"We've designed our extended stay properties to ensure we provide guests with everything they need when circumstances take them away from home for weeks at a time," said Matt McElhare, Choice's vice president for extended stay brands. "Through the launch of our campaigns, we aim to educate the growing population of extended stay travelers on how our brands offer the best value in the industry, while also highlighting the culture of our flagship brand, WoodSpring Suites, which has consistently set the standard for guest satisfaction in the segment. We're especially thankful to our owners and management company teams who help build and sustain this culture on property, consistently delivering a great guest experience."
AHLA Foundation held its No Room for Trafficking Summit and announced Survivor Fund grantees.
The summit featured expert panels and sessions on survivor employment and trafficking prevention.
Since 2023, the program has awarded more than $2.35 million to 27 organizations.
AHLA FOUNDATION RECENTLY held its annual “No Room for Trafficking Summit” to advance practices and reinforce the industry's commitment to addressing human trafficking through collaboration, education and survivor support. It also announced the 2025–2026 NRFT Survivor Fund grants, which support organizations providing services and resources for survivors.
The event aligned with the United Nations World Day Against Trafficking in Persons on July 30 and convened survivors, experts and industry leaders, AHLA Foundation said in a statement.
"For years, the No Room for Trafficking initiative has leveraged our resources to unite the hotel industry against human trafficking,” said Kevin Carey, AHLA Foundation president & CEO. “The NRFT Summit serves as a powerful call-to-action, bringing together the industry and our partners to strengthen our commitment and drive meaningful change.”
The NRFT Survivor Fund supports community-based anti-trafficking organizations and initiatives, the statement said. Since 2023, it has awarded more than $2.35 million to 27 organizations nationwide.
This year’s grantees include two survivor-founded groups and others focused on prevention and survivor support, including:
3Strands Global Coalition to Abolish Slavery & Trafficking
Empowered Network
Hoola Na Pua
New Friends New Life
Rebecca Bender Initiative
Restore NYC
Safety Compass
Salt & Light Coalition
UMD Safe Center
Wellspring Living
"The organizations supported through the No Room for Trafficking Survivor Fund are doing essential work to prevent human trafficking and support survivors," said Joan Bottarini, chief financial officer at Hyatt and chair of the NRFT Advisory Council. "Their expertise—especially the voices of those with lived experience—continues to shape how our industry engages as part of the solution to this global issue.”
The NRFT Advisory Council and Survivor Fund supporting companies include Aimbridge, Choice Hotels, Extended Stay America, Hilton Global Foundation, Hyatt Hotels Foundation, IHG Hotels & Resorts, The J. Willard and Alice S. Marriott Foundation, Marriott International, Real Hospitality Group, Red Roof, Sonesta, Summit Foundation, Vision Hospitality Group and Wyndham Hotels & Resorts.
The summit included keynotes and panels featuring lived experience experts on survivor employment and sessions with vendors and industry stakeholders on trafficking prevention.
In July 2024, AHLA Foundation granted $1 million to eight community-based organizations through the Survivor Fund at the third annual NRFT Summit.
The Federal Reserve held interest rates steady and gave no signal of a September cut.
Developers and brokers are calling for lower borrowing costs to unlock supply and revive stalled deals.
The Fed’s decision followed surprise news that the U.S. economy grew 3 percent in Q2.
THE FEDERAL RESERVE held its key interest rate steady and gave no indication of a cut in September, despite growing pressure from President Trump and his Fed appointees, USA Today reported. The July 30 decision keeps the Fed’s benchmark rate at 4.25 percent to 4.5 percent for a fifth straight meeting.
The Fed remains caught between its mandates of maximum employment and stable prices, the newspaper said. A slowing job market supports rate cuts, but rising inflation from Trump’s tariffs has made officials cautious about signaling next steps.
“Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate,” the Fed said. “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
The Fed said it considers labor market conditions, inflation pressures and expectations and financial and international developments in making its decisions.
Republican Fed governors Christopher Waller and Michelle Bowman dissented, favoring a rate cut, the first double-governor dissent since 1993. Waller has said tariff-driven inflation will likely be temporary and ease next year. Both are seen as potential Trump picks to succeed Powell when his term ends in May.
In its statement, the Fed dropped its earlier claim that uncertainty had diminished. That more optimistic tone had followed Trump’s 90-day pause on many tariffs, but a Friday deadline could reinstate the higher levies.
The Fed also said “economic activity moderated in the first half of the year”—a downgrade from its earlier description of growth as “solid” that could open the door to a September cut.
“We have made no decision about September,” said Jerome Powell, Fed’s chair, according to USA Today.
He said that the Fed hasn’t cut rates this year because the 4.1 percent unemployment rate meets its full employment goal, while its preferred inflation measure is 2.7 percent—above the 2 percent target. The Fed cuts rates to support growth and jobs and keeps them high to curb inflation.
“When we have risks to both goals, one is farther from target—and that’s inflation,” Powell said. “That calls for a modestly restrictive stance right now.”
In real estate, there’s broad agreement that rate relief is urgent, Real Deal reported. The pressure is acute in housing.
On CNBC Wednesday, LeFrak Organization’s Richard LeFrak compared housing costs to gas prices, something Americans feel immediately, and called for cuts to ease pressure on builders and buyers.
“It would be helpful to increase the supply of housing for interest rates to go down,” he said, framing the crunch as rate-driven as much as policy-driven.
This year’s spring sales season was the slowest in 13 years, according to Bloomberg, with mortgage rates stuck near 7 percent and affordability near its worst since the 1980s. Some buyers are backing out entirely.
Developers and brokers nationwide are increasingly vocal in calling for lower borrowing costs to unlock supply and restart stalled transactions. LeFrak, active in luxury and multifamily development, said rate-sensitive projects remain on hold.
“Do I think rates should be lower? Yes,” he said.
Fanning the flames, the Fed’s decision also came just after the surprise news that the U.S. economy grew at a 3 percent annual pace in the second quarter, topping the Dow Jones estimate of 2.3 percent.
“2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! ‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!” President Trump posted on Truth Social Wednesday morning.
Still, Powell and his colleagues are wary of easing too soon.
Forbes reported that mortgage rates peaked at 7.04 percent in January, fell to the mid-6 percent range in March, and held between 6.75 and 6.9 percent since May, ending June at 6.77 percent.