2025 Summer Leadership Series – Navigating Financing Strategies Amid Interest Rate Volatility 

In the second installment of Connect Money’s 2025 Leadership Series, executives share their perspectives on shaping financing strategies during a period of heightened interest rate volatility and potential surprise moves from the Federal Reserve. Keep reading for insights from Jordan Lang, President, McCourt Partners; Mike Hurley, Chief Market Strategist, NexPoint; Tony Chereso, CEO and President of The Inland Real Estate Companies, LLC; Stacy Chitty, Co-founder & Owner, Blue Vault Partners; and Michael Lee, Partner, HKS Real Estate Partners. 

The current volatility in the U.S. 10-year Treasury yield is reshaping decision-making. Are you rethinking financing strategies, possibly delaying investments or seeking alternative funding sources?  Are you lengthening, staying short, or hedging rates more actively given the Fed’s uncertain path?   

Jordan Lang, President, McCourt Partners: There’s a growing acceptance across the industry that higher rates are here for longer, and that reality is driving both pricing and strategy. For us, volatility has reinforced the importance of long-term capital and flexible capital structures. We’re still closing on assets, but every deal today is more complex. The capital stack often includes preferred equity structured with higher leverage or a participating return profile, and increasingly, we’re seeing control shift in favor of those preferred investors.   

We’re not waiting for the Fed to pivot to make new investments. If you wait until things are crystal clear, you can miss the window. We remain highly selective and are looking for opportunities that make sense across cycles. 

Jordan Lang

Mike Hurley

Mike Hurley, Chief Market Strategist, NexPoint: Our house view is that the yield on the 10-yr. US Treasury has been relatively stable over the last 10 months (staying within a relatively tight band of +/- 50 bps and currently near where it was last November), representing some of the lowest volatility readings in recent years.  

That said, we believe longer-term interest rates are in a secular bull market, and the risk is that they move higher. Rising rates put pressure on bonds and we believe traditional bond funds represent a tremendous risk to investors. This is because these strategies compete with each other on yield and consequently often sell their bonds before maturity (at a discount) to buy more recent bonds with a higher coupon.  

Accordingly, NexPoint is focused on alternative sources of income which do not risk investor capital in a rising rate environment, such as preferred stocks and merger arbitrage strategies. 

Tony Chereso, CEO and President of The Inland Real Estate Companies, LLC: Overall, I see a cautious, “survival mode” market – strategic projects only, a heavy scrutiny on debt terms, and new capital sources to fill gaps. Alternative investment and management firms are stepping in to fill in and fund the voids that banks are leaving.  

Yes, whenever this type of rate volatility is present, locking in protection is common. Our firm looks to preemptively fix rates to avoid surprises. Even if the Fed doesn’t move, the long end of the yield curve swings can change borrowing affordability overnight. Therefore, we prefer to protect ourselves against future rate surprises. 

Tony Chereso

What would be the single biggest market surprise from the Fed this year? A cut too soon, or no cut at all?   

Stacy Chitty

Stacy Chitty, Co-founder & Owner, Blue Vault Partners: That’s an interesting question considering the nature of the politics behind it. I think the bigger surprise of the two would be no cut at all. President Trump makes a good case for cutting interest rates now. Fed Chair Jerome Powell probably doesn’t want to do it for multiple reasons.  

I think it will play out with Powell giving in and lowering rates a tad, but not as much as needed and not as much as Trump would like. Even though Powell will lower interest rates by a quarter or maybe even a half before year’s end, his time at the helm is short and once he’s replaced by a Trump appointee rates will accelerate lower at that point. 

Michael Lee, Partner, HKS Real Estate Partners: While many still hope for rate cuts, the broader market isn’t pricing in any immediate cuts. The biggest surprise would be a sudden, unanticipated cut of .50% or more, especially if it leads to borrower rates increasing, as we saw in fall 2024. After three years of uncertainty, I’m not confident that rate cuts directly translate to lower rates, especially in the short term.   

Michael Lee

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