Company: ADAMM
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0001273685-25-000072
Chunk: 206

Company: ADAMAS TRUST, INC.
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 2
Chunk 206
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 appropriate. Since its December 2024 meeting through its June 2025 meeting, the Federal Reserve did not make any further changes to the target range for the federal funds rate. The Federal Reserve noted in its June 2025 statement that any future cuts to the target range for the federal funds rate will depend on a careful assessment of incoming data, the evolving outlook, and the balance of risks to its dual mandate of achieving maximum employment and an inflation rate of two percent. As reflected on the “dot plot” included in the projection materials from the Federal Reserve’s June 2025 meeting, most Federal Reserve officials indicated that an additional 50 basis points or more in cuts to the target range for the federal funds rate by the end of 2025 would be appropriate. The Federal Reserve has adopted a wait and see approach before it makes any cuts given that the impact of tariffs on inflation is still developing. The Federal Reserve’s June 2025 statement noting elevated economic uncertainty along with the forecasted effects of tariffs on the U.S. economy and inflation have cautioned some market commentators’ expectations of the number and extent of further cuts, if any, to the target range for the federal funds rate in 2025. 

Uncertainty exists regarding the U.S. debt limit, which is the statutory maximum amount of money that the U.S. government may borrow to meet its existing obligations. The U.S. government reached the debt limit in the middle of January 2025 and the U.S. Treasury began taking “extraordinary measures” to keep the U.S. from breaching its obligations. In July 2025, the U.S. Congress approved the OBBBA, which raised the debt limit by $5 trillion.  While the impact of the OBBBA remains to be seen, some market commentators caution that the OBBBA will grow the country’s budget deficits substantially, potentially leading to a dynamic of increasing deficits, higher interest rates, and slower growth. The current administration, however, remains optimistic that the OBBBA, in combination with increased tariff revenues, will reduce deficits. A weakened economy and/or higher interest rates may put pressure on the ability of our operating partners, tenants and borrowers to meet their obligations to us, and would likely adversely impact the value of our assets, among other things, any of which could materially adversely affect our results of operations and financial condition.

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In September 2008, the U.S. Government placed Fannie Mae and Freddie Mac into the conservatorship of the FHFA in order to