After announcing its first pause on interest rate hikes since March of last year, Federal Reserve Chair Jerome Powell told reporters that he’s keeping an eye on commercial real estate and watching the situation as it pertains to the banking system “very carefully.”
“There’s a substantial amount of commercial real estate in the banking system; a large part of it is in smaller banks,” Powell told reporters on Wednesday. “To the extent that it’s well distributed, then the system could take losses. We do expect that there will be losses, but there will be banks that have concentrations, and those banks will experience larger losses. So we’re well aware of that, we’re monitoring it carefully.”
