Powell: ‘There will be bank failures’ caused by commercial real estate losses

The Hill ^ | 03/07/2024 | TOBIAS BURNS

[ChicagoConservative27]

Federal Reserve Chair Jerome Powell said Thursday he expects to see some banks fail due to their exposure to the commercial real estate sector, which has declined significantly in value following the shift to remote work.

Powell said the banks that are in trouble with falling office space and retail assets are not the big banks, which were designated as “systemically important” in the aftermath of the 2008 financial crisis. That episode, which resulted in a taxpayer bailout of the financial sector, was also triggered by unsound real estate assets.

Rather, the banks at risk of failure now Powell identified as smaller and medium-sized.

“This is a problem we’ll be working on for years more, I’m sure. There will be bank failures,” he said during a Thursday hearing on the Fed’s monetary policy in the Senate Banking Committee.

[Magic Fingers]

Companies that don’t evolve to remote work will be stuck with the lazy and stupid.(certain jobs and fields don’t apply)

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Old school, control freak managers (including on FR) say “GRRRRR”.

[old curmudgeon]

2% or 6%.....multiplied by the inflated price of xxx is more than the same interest rate at the previous year’s cost.

The rate is not as important as maintaining a stable rate so business can plan and not get suckered.

It is natural for interest rates to rise and fall in accordance with the requirement for money rises and falls. What is screwing things up is for “academics” who think they are smarter than the money markets trying to manage something that they spent the last 100 years demonstrating that they do not understand.

Ron Paul was correct years ago when he pointed to the incompetence of the FED.