NAR’s Chief Economist took to his keyboard to express his opinion on the latest interest rate hike by the Federal Reserve.
You can read his reaction below:
“The latest interest rate hike by the Federal Reserve is unnecessary and harmful. Consumer price inflation has been decelerating and will continue this trend. After the awful 9% consumer price inflation in the summer of last year, the latest data shows 5% inflation. It will be even lower as the heavyweight component to inflation, which is housing rent, will inevitably slow down given the 40-year high robust construction of new empty apartment units.
In addition, there is significant additional monetary policy tightening already occurring. The fast rate hikes by the Fed have upended the balance sheets of many small regional banks. They are becoming zombie-like banks, unable to lend even to good businesses as they are more concerned with balance sheet shuffling for survival. This situation will worsen with each additional rate hike by the Federal Reserve.
Only by stopping the rate hikes or even a reversal later in the year after verifying much calmer inflation rates will the small banks have a better chance of survival against the big banks.”